A change to a longstanding stamp duty relief was made with no warning at the end of June via the Finance Bill which potentially makes reorganisations of companies and groups of companies more costly.
Provided a significant number of conditions are satisfied, broadly requiring shareholders in one company immediately after the transaction to end up with a similar proportion of shares in the acquiring company, a new holding company can be introduced into a structure without payment of stamp duty at 0.5%. However, an additional restriction has now been introduced denying the relief where it is reasonable to suppose that there are arrangements for one or more persons to obtain control of the acquiring company.
While it is understood that the move was aimed at stopping planning designed to sidestep a previous change - namely no longer being able to avoid stamp duty on takeovers effected via cancellation schemes of arrangement - the new restriction may affect legitimate planning. That could include reorganising businesses and groups of companies prior to selling off some but not all of them, or partitioning them between different groups of shareholders. Given that last minute planning may be more costly from a stamp duty perspective, it is advisable regularly to review group structures to optimise them for likely transactions well before they actually happen.