HMRC has published draft legislation in Finance Bill 2019/20 proposing changes to the calculation of stamp duty and SDRT for certain connected-company transactions. The changes expand the scope of the ‘market value rule’ that was introduced last year for transfers of listed securities to connected companies, and they appear to target the use of ‘swamping’ to minimise stamp duty/SDRT on pre-sale reorganisations involving share-for-share exchanges. The focus of the proposed changes is narrower than had originally been considered in consultation. Nevertheless, they may exacerbate difficulties encountered with existing reliefs, and may affect transactions other than pre-sale reorganisations.
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HMRC has published draft legislation in Finance Bill 2019/20 proposing changes to the calculation of stamp duty and SDRT for certain connected-company transactions. The changes expand the scope of the ‘market value rule’ that was introduced last year for transfers of listed securities to connected companies, and they appear to target the use of ‘swamping’ to minimise stamp duty/SDRT on pre-sale reorganisations involving share-for-share exchanges. The focus of the proposed changes is narrower than had originally been considered in consultation. Nevertheless, they may exacerbate difficulties encountered with existing reliefs, and may affect transactions other than pre-sale reorganisations.
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