Fog clears over stamp duty relief on corporate deals

Fresh guidance from HMRC over stamp duty land tax relief around moving property assets around a group could help kick-start corporate deals, according to Andy Parker, corporate finance partner at PwC Manchester.

Parker explained: "HMRC had stopped giving clearance on SDLT group relief while considering the line between genuine commercial deals and a concern that businesses might be enveloping property in companies purely to avoid SDLT on a sale. Uncertainty on the tax position has gummed up genuine commercial transactions, as businesses assess the tax cost of their real estate transactions and corporate reorganisations.

"HMRC has now acknowledged that buying companies instead of their individual assets is normal commercial practice. It is acceptable for a business to acquire a property-owning company and then transfer the property to a different company in the group and SDLT group relief will not be denied on this basis alone.

"This brings to an end a considerable period of uncertainty and will help get transactions moving again."

Parker said he knew of transactions that stalled because of uncertainty over whether this relief was available when a business bought a company and then transferred the property to another part of the group.

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