In HSBC Holdings PLC and Vidacos Nominees Ltd v HMRC (C-569/07) the CJEU held in 2009 that the Capital Duties Directive prohibited the UK's 1.5% SDRT charge on the issue of shares to a clearance service within the EU. Following Vidacos the outstanding question was whether it would apply where the depository or clearance service was outside the EU.
This case concerned the merger of a subsidiary of HSBC with Household International Inc. under the terms of which the shareholders of Household were entitled to be issued shares in HSBC. In order to enable former Household shareholders to trade their new securities on US stockmarkets they were entitled to elect instead to be issued HSBC ADRs....
