Reversal of fortune
KEY POINTS
- Section 77A of FA 1986 is a new anti-avoidance provision limiting stamp duty relief in s 77.
- Arguably the legislation already contained an adequate anti-avoidance rule.
- Reversal of many years of HMRC practice.
- The effect on demergers involving splitting a business into separate ownership.
- Let HMRC know about problems caused by s 77A.
Reversal of Fortune is a drama that presents ‘a complex puzzle of ambiguous evidence and conflicting theories’ according to an internet review. That narrative is apt to describe the driver for a change made in 2016 to the stamp duty relief that applies to share-for-share exchanges FA 1986 s 77 (acquisition of target company’s share capital).
The change requires an extra condition to be met before the relief is available. It was presented...
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