Schedule 35 - Stamp duty: withdrawal of relief for company acquisitions: supplementary provisions

Finance Bill – in a Public Bill Committee at 5:15 pm on 18th June 2002.

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Photo of Ruth Kelly Ruth Kelly Financial Secretary, HM Treasury 5:15 pm, 18th June 2002

I beg to move Government amendment No. 243, in page 467, line 20, at end insert—

'Change of control due to interest of loan creditor

4A (1) Section 111 does not apply by reason of control of the acquiring company changing as a result of a loan creditor becoming, or ceasing to be, treated as having control of the company if the other persons who were previously treated as controlling the company continue to be so treated

(2) In sub-paragraph (1) ''loan creditor'' has the meaning given by section 417(7) to (9) of the Taxes Act 1988.'.

Schedule 35 contains a number of sets of circumstances under which the clawback of section 76 relief is not allowed when there is a change of control. However, we have received representation

concerning the change of control due to the interest of a lone creditor. It was not the intention to trigger the clawback charge in circumstances in which control of the acquiring company changes because a lone creditor comes to be or ceases to be treated as having control, provided the original shareholders still control the acquiring company. The amendment therefore ensures that section 76 relief is not withdrawn in such circumstances. It addresses points that have been made to us by representative bodies, so I commend it to the Committee.

Amendment agreed to.

Amendments made: No. 244, in page 467, line 22, leave out sub-paragraph (1) and insert—

'(1) If any duty payable under section 111 or this Schedule is not paid within the period of 30 days within which payment is to be made, interest is payable on the amount remaining unpaid.'.

No. 245, in page 468, line 22, after 'company' insert

'and was above it in the group structure'.

No. 246, in page 468, line 32, at end insert—

'(aa) a company is ''above'' another company in a group structure if it controls—

(i) that company, or

(ii) another company that is above that company in the group structure;'.—[Ruth Kelly.]

Schedule 35, as amended, agreed to.