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Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017

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This is the original version (as it was originally enacted).

Acquisition relief

This section has no associated Explanatory Notes

3(1)Where—

(a)a company (“the acquiring company”) acquires the whole or part of the undertaking of another company (“the target company”), and

(b)all the conditions specified below are met,

the amount of tax chargeable on a land transaction entered into for the purposes of or in connection with the transfer of the undertaking or part is limited to 0.5% of the chargeable consideration for the transaction (or such other proportion of that consideration as the Welsh Ministers may specify by regulations under this paragraph).

(2)Relief under this paragraph is referred to in this Schedule as “acquisition relief”.

(3)The first condition is that the consideration for the acquisition consists wholly or partly of the issue of non-redeemable shares in the acquiring company to—

(a)the target company, or

(b)all or any of the target company’s shareholders.

(4)Where the consideration for the acquisition consists partly of the issue of non-redeemable shares, that condition is met only if the rest of the consideration consists wholly of—

(a)cash not exceeding 10% of the nominal value of the non-redeemable shares so issued,

(b)the assumption or discharge by the acquiring company of liabilities of the target company, or

(c)both of those things.

(5)In sub-paragraphs (3) and (4), “non-redeemable shares” means shares that are not redeemable shares.

(6)The second condition is that the acquiring company is not associated with another company that is a party to arrangements with the target company relating to shares of the acquiring company issued in connection with the transfer of the undertaking or part.

(7)For this purpose, companies are associated if one has control of the other or both are controlled by the same person or persons; and the reference to control is to be construed in accordance with sections 450 and 451 of the Corporation Tax Act 2010 (c. 4).

(8)The third condition is that the undertaking or part acquired by the acquiring company has as its main activity the carrying on of a trade that does not consist wholly or mainly of dealing in chargeable interests.

(9)In sub-paragraph (8), “trade” has the same meaning as in section 1119 of the Corporation Tax Act 2010 (c. 4).

(10)In this paragraph, “arrangements” include any scheme, agreement or understanding, whether or not legally enforceable.

(11)This paragraph is subject to paragraph 5 (withdrawal of reconstruction or acquisition relief).

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