Heather Corben and Adrian Brettell (King & Wood Mallesons) consider the legislative history of FA 1986 s 77, the practical problems caused by using the wider meaning of stock and the revised Stamp Office interpretation causing difficulties in obtaining the relief.
Section 77 of the Finance Act 1986 provides relief from UK stamp duty on of shares when a new holding company (NewCo) is inserted above an existing company (Target) by way of a share for share exchange subject to the conditions for relief being satisfied. This can be particularly useful when inserting a clean company prior to a float.
77 works
In summary the conditions 77 are that:
NewCo acquires the entire issued share capital of Target;
the acquisition is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which one of the main purposes is tax avoidance;
the consideration for...
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Heather Corben and Adrian Brettell (King & Wood Mallesons) consider the legislative history of FA 1986 s 77, the practical problems caused by using the wider meaning of stock and the revised Stamp Office interpretation causing difficulties in obtaining the relief.
Section 77 of the Finance Act 1986 provides relief from UK stamp duty on of shares when a new holding company (NewCo) is inserted above an existing company (Target) by way of a share for share exchange subject to the conditions for relief being satisfied. This can be particularly useful when inserting a clean company prior to a float.
77 works
In summary the conditions 77 are that:
NewCo acquires the entire issued share capital of Target;
the acquisition is effected for bona fide commercial reasons and does not form part of a scheme or arrangement of which one of the main purposes is tax avoidance;
the consideration for...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
