SDLTM09280 | Transfer of shares or securities: Section 75C (1)

(This page was introduced on 15 January 2020 and updated on 14 May 2021)

A transaction consisting wholly of the transfer of shares or securities will not be treated as a scheme transaction for the purposes of Section 75A, if it would otherwise comprise the first in a series of scheme transactions. Likewise, where there are sequential transfers of shares or securities, whether they are the same or different, they too will not be regarded as scheme transactions if they precede any other scheme transaction.

This view equally applies to the transfer of units in a unit trust scheme as they are treated as if they were shares.

In this case, as the transaction is not deemed to be a scheme transaction, the consideration for the transfer of shares or securities will not be included when calculating the chargeable consideration for the notional transaction between V and P.

Pre-transfer administrative tasks relating solely to the transfer of shares and securities, for example shareholder approval for the transfer of shares to occur, will not usually be regarded as scheme transactions and can also be ignored when considering if the first scheme transaction would be a transfer of shares or securities.

Where there is another scheme transaction before the transfer of shares or securities, the exclusion will not apply and the transfer will be regarded as a scheme transaction for the purposes of Section 75A.

The exclusion applies only to a transfer of existing shares - any issue of shares or securities will not fall within this exemption for the purposes of Section 75A.