Stamp duty relief on share-for-share exchanges

The government has tabled a new clause for Finance Bill 2016 introducing a change to the rules on stamp duty share-for-share relief with effect from 29 June 2016.

The new clause provides that no relief for stamp duty on a share-for-share exchange, where shareholders in the acquiring company after the transaction mirror those in the target company ( FA 1986 S 77), will be available where arrangements are in place for a change of control of the acquiring company at the time of the share-for-share exchange.

The changes will not affect family reconstructions and commercially driven demergers where there is no arrangements at the time of the transaction for a change of control of the acquiring company. The new clause will however prevent relief applying in IPO transactions where the interposing of a new company by way of a share for share is used to change control of the company.

The new clause will have effect for any instrument executed on or after 29 June 2016 and will include arrangements entered into before that date.