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Stamp duty relief on share-for-share exchanges

16 January 2018 / Sean Randall
Issue: 4631 / Categories: Comment & Analysis
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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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