SDLTM09290 | Connected Companies, Section 53 FA03: Section 75C (6)

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

Where P is a company and connected to V, Section 53 FA03 will apply to the notional transaction. The chargeable consideration for the transfer will be taken to be not less than the market value at the effective date of transaction.

Where the largest amount, or the aggregate amount, for any of the scheme transactions is greater than the market value at the effective date of transaction, that amount will be taken as the chargeable consideration for the notional transaction.

When considering whether Section 53 applies, you should consider the exception cases listed in Section 54.

For the purposes of applying Section 54, the notional land transaction may, depending on the facts of the case, retain the character of the original transfer,

For example, where the actual land transaction was a distribution of the assets of a company, then, depending on the facts of the case, the notional land transaction may retain the characteristic of a distribution for the purposes of applying Sections 53 and 54. To retain its character as a distribution, P would need to be an immediate shareholder of V.

Section 1122 of the Corporation Tax Act 2010 has effect for the purposes of Section 53.

For further information, see SDLTM06500.