STSM042310 | Exemptions and reliefs: reliefs: stamp duty group relief - making a claim

The Mechanics of Making a Claim

Claim letter

The legislation does not describe a precise form of words for the way in which a claim to relief should be presented. It merely provides that it be “shown to the satisfaction of the Commissioners”. A letter of claim must contain all the information below. The responsible officer who signs the letter must be able to give an unqualified statement from first-hand information.

The claim letter needs to include all of the following:

1. A statement that a claim for relief from Stamp Duty under Part 1 of Schedule 13 Finance Act 1999 (transfer on sale) is made under Section 42 Finance Act 1930, as amended, in respect of the specified instruments.

2. Details of the dates of all instruments on which relief is claimed.

3. Details of the authorised and issued share capital of the parent and subsidiary companies and of any intermediate companies through which the relationship required under the legislation is traced.

4. In the case of non-UK companies, include sufficient information to show that they qualify as bodies corporate for the purposes of the relief. A list of non-UK entities previously accepted as bodies corporate can be found in STSM042260.

5. If the parties to the instrument(s) on which relief is claimed are indirectly associated a family tree diagram should be supplied, showing the percentage of ownership for each branch.

6. State whether any class of share carries a right to only a fixed dividend and no other share in the profits.

7. If there is more than one class of share in issue, set out the profit rights attached to each class of share and set out the asset distribution rights attached to each class of share in any winding up of the company.

8. State whether any of the bodies corporate is in liquidation.

9. Give details of the shareholders of all the issued shares in each subsidiary company and any intermediate company through which the relationship required under the legislation is traced. If the relationship between companies is dependent upon shares held by nominees, documentary evidence of the beneficial ownership of the shares should be provided.

10. Confirm that at the date of execution of the instrument on which relief is being claimed no arrangement was in existence by virtue of which at that or some later time any person had or could obtain, or any persons together had or could obtain, control of the transferee but not the transferor.

11. Say whether it’s intended that (a) the relationship required by the legislation is to be maintained; and (b) the transferee body corporate will retain the beneficial ownership of the transferred property.

12. Give the amount and form (e.g. cash, shares etc.) of the consideration and say whether it was satisfied from cash resources through an inter-company loan account or by way of a third party loan

13. Give an assurance that none of the instruments were executed in pursuance of or in connection with an arrangement described in Section 27(3) Finance Act 1967. Guidance on HMRC’s practice when considering whether such an arrangement exists is available in STSM042270 and STSM042300.

Responsible Officer

A letter of claim is acceptable if it is signed by:

• a director, or the secretary, of the ultimate parent company or of the first common parent of the parties to the transaction,

• a member of the parent company who has the right to attend board meetings where policy is decided,

• an in-house solicitor of the parent company,

• a director or the secretary of the subsidiary company if supported by a letter from a board member or the secretary of the parent company,

• a solicitor or accountant acting for the parent company (in such cases evidence of authorisation should be provided), or

• an administrator or receiver appointed to the parent company under the Insolvency Act.

Enclosures with the claim letter

The completed and signed claim letter should be accompanied by:

1. An electronic copy (for example, a scanned PDF) of all documents and instruments referred to in the letter.

2. To minimise file sizes HMRC will only require a list of shareholders and the shares they hold (including class of shares) for each company rather than copies of full registers of members (unless we specifically request them).

3. A copy of the latest accounts of the transferee company if the consideration was provided from cash resources.

4. Copies of any agreement with a third party relating to the provision of consideration.

5. Copies of correspondence, agreements, board minutes or any other writings, etc., if the relationship between the parties or the ownership of the transferred property is not intended to continue or there was any possibility that it might not continue.

Qualified claim letters

Claim letters qualified by phrases such as ‘as far as I am aware’ are not acceptable. The responsible officer signing the letter must be in a position to make an unqualified statement from first-hand information. If they are not aware of all the facts and circumstances they should make themselves aware before signing. If a company’s solicitor states ‘I am informed and verily believe’ that should be accepted.

Further information for customers on the practicalities of making a claim for relief is available on gov.uk