A stamp duty blunderbuss has been fired at partition demergers. Is this fair, asks Sean Randall.
Readers may be aware of a change made in 2016 to the stamp duty relief that applies to share-for-share exchanges, FA 1986, s77 (acquisition of target company’s share capital). The change requires an extra condition to be met before the relief is available. It was presented as both a response to tax avoidance and consistent with the policy of the relief. The particular threat to tax revenue was not identified, however. That omission and the timing of the change are curious. Determining whether the impact of the change on corporate reconstructions was intentional is subjective. One can reasonably draw inferences that some types have been unfairly hit.
In a recent article for Taxation*, Sean Randall of KPMG in the UK’s Stamp Taxes team takes a look at the changes made, and some of the consequences for those who deal with corporate reconstructions.
* First published in Taxation on 18 January 2018. Reproduced with permission.
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