Relief not withdrawn in case of exempt acquisitionU.K.
4(1)Section 111 does not apply if—
(a)the transferee company ceases to be a member of the same group as the transferor company as a result of an acquisition of shares by another company (“the parent company”) in relation to which acquisition relief applies, and
(b)the transferee company is immediately after that acquisition a member of the same group as the parent company (“the new group”).
(2)For this purpose—
(a)“acquisition relief” means relief under section 75 of the Finance Act 1986 (c. 41); and
(b)references to an acquisition in relation to which such relief applies are to an acquisition such that an instrument effecting the transfer of the shares is exempt from stamp duty by virtue of that provision.
(3)But if before the end of the period of two years beginning with the date on which the relevant instrument was executed—
(a)the transferee company ceases to be a member of the new group, and
(b)at the time when [F1the transferee company ceases] to be a member of the new group [F2it or a relevant associated company (as defined in sub-paragraph (4) below) holds] an estate or interest in land that—
(i)was transferred [F3to the transferee company] by the relevant instrument, or
(ii)is derived from an estate or interest that was so transferred,
[F4and that has not subsequently been transferred at market value by a duly stamped instrument on which ad valorem duty was paid and in respect of which group relief was not claimed],
section 111 and the provisions of this Schedule apply [F5as if the transferee had then ceased to be a member of the same group as the transferor company and had then held the estate or interest referred to in paragraph (b).]
[F6(4)In sub-paragraph (3)(b) “relevant associated company”, in relation to the transferee company, means a company that is in the same group as the transferee company immediately before the transferee company ceases to be a member of the new group and which ceases to be a member of the new group in consequence of the transferee company so ceasing.]
Textual Amendments
F1Words in Sch. 34 para. 4(3)(b) substituted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(6)(a)(i)(11) (with s. 126(9)(10))
F2Words in Sch. 34 para. 4(3)(b) substituted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(6)(a)(ii)(11) (with s. 126(9)(10))
F3Words in Sch. 34 para. 4(3)(b)(i) substituted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(6)(b)(11) (with s. 126(9)(10))
F4Words in Sch. 34 para. 4(3)(b) substituted (retrospective to 15.4.2003) by Finance Act 2003 (c. 14), s. 126(6)(c)(11) (with s. 126(9)(10))