188体育

Relief is extended to any 鈥渂ody corporate鈥� through the definition of 鈥榗ompany鈥檌n section 100(1) FA 2003 (see ). To determine whether an entity qualifies as a body corporate HM Revenue & Customs (HMRC) will follow the guidelines for stamp duty set out at STSM042220. Refer to SDLTM23020.

Meaning of subsidiary

Paragraph 1(2)(b) requires that the companies claiming relief must be 75% subsidiaries of one another or 75% subsidiaries of a third company.

Paragraph 1(3) provides that for a company (A) to be a 75% subsidiary of another company(B) if:

• company B is the beneficial owner of at least 75% of the ordinary share capital of company A;
• it is beneficially entitled to not less than 75% of profits available for distribution to equity holders; and
• it would be entitled to not less than 75% of any assets of A available for distribution to equity holders on winding up.

Paragraph 1(4) provides that 鈥榦wnership鈥欌�� for these purposes is either directly or indirectly through another company or group of companies. The rules in section 838(5) to(10) ICTA 1988 apply to determine the amount of ordinary share capital. Paragraph 1(5)defines 鈥渙rdinary share capital鈥�. Refer to SDLTM23020.

Paragraph 1(6) applies Chapter 6 of Part 5 of the Corporation Tax Act2010 which defines 鈥渆quity holder鈥�.

The meaning of subsidiary is also relevant to the arrangements test in paragraph 2(2)(b)of Schedule 7

The tests in paragraph 1 of Schedule 7 apply independently of the tests in paragraph 2 and claims are not allowable if these tests are not met.

Paragraph 2 of Schedule 7

Paragraph 2 provides anti-avoidance rules which restrict the availability of group relief. It will prevent relief being allowable in circumstances where certain 鈥榓rrangements鈥� are in place.

Meaning of arrangements

鈥淎rrangements is defined generally for the purposes of paragraph 2 in paragraph2(5) to include any scheme, arrangement or understanding, whether or not legally enforceable鈥�. This definition is used in section 76(6A)(b) FA 1986 (inserted bysection 112(6) FA 2002 see ) but鈥漚rrangements鈥� was not defined for the equivalent stamp duty provisions insection 42(2) FA 1930 or section 27(2) FA 1967. Under this new definition,鈥漚rrangements鈥� will include schemes, arrangements or understandings not inwriting and the existence of arrangements in a particular claim will depend on a consideration of all of the facts relating to the claim and the surrounding circumstances.

In considering whether arrangements exist that might disqualify the claim, HMRC will seek to establish whether there was any scheme, arrangement or understanding.