STSM042510 | Exemptions and reliefs: reliefs: Section 77A – voluntary liquidation of a company

For Stamp Duty relief to be available under section 77(1) FA1986, the provisions at s.77(3)(i) FA1986 require there to be no disqualifying arrangements in existence at the time the instrument transferring the shares under the share for share exchange is executed.

Occasions can arise where, under arrangements, following a share for share exchange with a target company, the acquiring company is wound up voluntarily and the whole or part of the target company is transferred or sold following procedures in section 110 IA86.

A voluntary liquidation is also sometimes used in a hive down of shares within an existing group where the acquiring company is then liquidated.

HMRC do not regard the appointment of a liquidator in a voluntary liquidation as a change of control of the acquiring company for the purpose of determining whether there are disqualifying arrangements under s.77A FA1986.

Instances where, under arrangements, an acquiring company is wound up other than by a voluntary liquidation, will be considered by HMRC Stamp Taxes on a case by case basis.

STSM042460 provides more information on “disqualifying arrangements”.

“Control” is to be read in accordance with section 1124 CTA2010.

“Arrangements” includes any agreement, understanding or scheme (whether or not legally enforceable).