Takeovers and reductions of capital

In the Autumn Statement, the chancellor announced proposals to prevent the use of cancellation schemes as a means of reducing stamp duty and SDRT costs on takeovers. The draft regulations to implement this announcement were published on 13 January 2015. They prohibit the use of reductions of capital by companies as part of a takeover. This should achieve the government’s goal, but at the price of limiting the flexibility of UK company law.