SDLTM23035 - Reliefs: Group, Arrangements

Group relief in relation to transactions carried out in preparation for an acquisition to which section 75 Finance Act 1986 (acquisition relief) applies.

Concern has been expressed that because the transactions are carried out in preparation for the acquisition there may be 바카라 사이트˜arrangements바카라 사이트™ which deny the availability of group relief under FA03/SCH7/PARA2

There are two relevant types of arrangements:

  • Arrangements whereby someone could obtain control of the transferee but not of the transferor (바카라 사이트˜control바카라 사이트™ arrangements) (paragraph 2(1) of schedule 7)
  • Arrangements whereby transferor and transferee will cease to be members of the same group by reason of the transferee ceasing to be a 75% subsidiary of the transferor or of a third company바카라 사이트™ (바카라 사이트˜de-grouping바카라 사이트™ arrangements) (paragraph 2(2)(b) of Schedule 7)

In many acquisitions to which FA1986/S75 will apply both a change of control and a de-grouping will occur.

Paragraph 2 (1) ends with a proviso to the effect that arrangements entered into with a view to an acquisition to which FA1986/S75 applies are not 바카라 사이트˜control바카라 사이트™ arrangements denying group relief. Paragraph 2 (2) (b) does not include a similar proviso. Paragraph 2 must read as a whole and the proviso must apply also to paragraph 2 (2) (b), otherwise it would in practice be of no effect. It is accepted that arrangements entered into with a view to an acquisition to which FA1986/S75 applies are not 바카라 사이트˜de grouping바카라 사이트™ arrangements denying group relief