Finance Act, 1973

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Reconstructions or amalgamations of capital companies.

72.—(1) If, in the case of a transaction, a capital company or a capital company which is in the process of being formed (in this section referred to as the transferee company) acquires either—

(a) the undertaking or part of the undertaking of another capital company (in this section referred to as the transferor company), or

(b) share capital of another capital company to an extent that, after that transaction, but not necessarily as a result of that transaction, the transferee company owns at least 75 per cent. of the issued share capital of that other company (in this section referred to as the transferor company),

then, subject to the provisions of this section, stamp duty on the statement delivered in accordance with section 69 (1) shall be charged at the rate of zero per cent. (in this section referred to as the reduced rate):

Provided that, where the percentage referred to in paragraph (b) of this subsection is reached by means of two or more transactions, the reduced rate shall apply only to the transaction whereby this percentage is achieved and to any transaction subsequent to the achievement and retention of that percentage.

(2) Subsection (1) of this section shall apply only where the consideration for the acquisition (except such part thereof as consists of the transfer to or discharge by the transferee company of liabilities of the transferor company) consists—,

(a) where the undertaking or part of the undertaking of the transferor company is acquired, of the issue of shares in the transferee company to the transferor company or to holders of shares in the transferor company; or

(b) where shares of the transferor company are acquired, of the issue of shares in the transferee company to the holders of shares in the transferor company in exchange for shares held by them in the transferor company,

with or without a payment in cash, provided that the payment in cash does not exceed 10 per cent. of the nominal value of the shares in the transferee company which are comprised in the consideration.

(3) The statement, which by virtue of this section is charged at the reduced rate, shall become chargeable with stamp duty at the rate specified in section 69 of this Act if the transferee company does not retain, for a period of five years from the date of the transaction in respect of which stamp duty at the reduced rate was charged, at least 75 per cent. of the issued share capital of the other company and all the shares which it held following that transaction, including the shares acquired whether by way of a transaction or otherwise before that transaction and held at the time thereof:

Provided, however, that the reduced rate shall continue to apply if the transfer, as a result of which the shares in question were not held for a period of five years, was either—

(a) a transfer forming part of a transaction which would of itself qualify for the reduced rate pursuant to subsection (1) of this section, or

(b) a transfer in the course of the liquidation of the transferee company.

(4) Where, by reason of subsection (3) of this section, stamp duty becomes chargeable at the rate specified in section 69 of this Act when the transferee company concerned within a period of five years from the date of any transaction in respect of which stamp duty was charged at the reduced rate—

(a) ceases to retain at least 75 per cent. of the issued share capital of the transferor company concerned, or

(b) disposes of any of the shares of the said transferor company which it held after the transaction to which the reduced rate was applied,

then the statement which was delivered to the registrar pursuant to section 69 (1) of this Act in relation to the transaction in respect of which stamp duty was charged at the reduced rate shall be charged

with stamp duty at the rate which would have been charged in the first instance if subsection (1) of this section had not applied to the transaction and the statement thus charged shall have applied to it the provisions of this Chapter save that, for the purposes of subsections (2) and (3) of section 69 of this Act, the date of the transaction shall be the date on which the event specified in paragraph (a) or (b), as the case may be, of this subsection occurred.

(5) This section shall apply only where the effective centre of management or the registered office of the transferor company concerned is in a Member State.