The UK tax authority HMRC has introduced a clarification confirming that intra-group transactions are eligible for group relief related to Stamp Duty Land Tax (SDLT). The declaration follows a meeting by HMRC with representative bodies concerning the application of a Targeted Anti-Avoidance Rules which introduced in 2003 and restrictions on claw back rules.

HMRC has confirmed that relief is available should a business decide to acquire a property owning corporation rather than acquiring an asset from a business, and that the asset can then be transferred into a dissimilar company within the purchasing group. The buyer may then liquidate or wind up the acquired company. The tax treatment will be the same though the buyer only becomes a member of a group for Stamp Duty Land Tax purposes as a result of the acquisition.

Selling of shares rather than land so as to give less tax, the UK tax authority has clarified. This is in line with the general approach in the UK that the taxpayer is entitled to arrange his affairs in a way that legally and reasonably reduces the amount of tax payable.

Though, the relief will be available when “the transactions don’t form part of any larger scheme of arrangement that might have tax consequences.” In other words, if the arrangement is part of an artificial tax avoidance scheme it will not be immune from a challenge by the tax authorities and relief may be denied.

Prior to issuing the clarification HMRC met with the British Property Federation, the Chartered Institute of Taxation, the Law Society, and the Stamp Taxes Practitioners’ Group.