Stamp duty at ½% will normally apply to an acquisition of UK shares. However, FA 1986, s 77 provides a valuable stamp duty exemption for qualifying share-for-share exchanges. Typically, the exemption applies to the acquisition of shares in an existing company (‘Target’) by a new company (‘Newco’), which satisfies its purchase consideration entirely in the form of a fresh issue of its shares.
In the February issue to ‘Tax Insider’, Peter Rayney reviews a surprising change to stamp duty share-for-share exchange relief in Finance Act 2016.
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>> Share Exchanges: A Stamp Duty Problem?
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