The Stamp Duty and Stamp Duty Reserve Tax (Open-ended Investment Companies) Regulations 1997

Conversion of an authorised unit trust to an open-ended investment company—exemption from stamp duty charge

7.—(1) Stamp duty shall not be chargeable on an instrument transferring any property which is subject to the trusts of an authorised unit trust (“the target trust”) to an open-ended investment company (“the acquiring company”) if the conditions set out in paragraph (2) are fulfilled.

(2) Those conditions are that—

(a) the transfer forms part of an arrangement for the conversion of an authorised unit trust to an open-ended investment company, whereby the whole of the available property of the target trust becomes the whole of the property of the acquiring company;

(b) under the arrangement all the units in the target trust are extinguished;

(c) the consideration under the arrangement consists of or includes the issue of shares (“the consideration shares”) in the acquiring company to the persons who held the extinguished units;

(d) the consideration shares are issued to those persons in proportion to their holdings of the extinguished units; and

(e) the consideration under the arrangement does not include anything else other than the assumption or discharge by the acquiring company of liabilities of the trustees of the target trust.

(3) An instrument on which stamp duty is not chargeable by virtue only of this regulation shall not be taken to be duly stamped unless it is stamped with the duty to which it would be liable but for this regulation or it has, in accordance with section 12 of the Stamp Act 1891(1), been stamped with a particular stamp denoting that it is not chargeable with any duty.

(4) In this regulation and in regulations 8 to 10 “the whole of the available property of the target trust” means the whole of the property subject to the trusts of the target trust, other than any property which is retained for the purpose of discharging liabilities of the trustees of the target trust.

(5) For the purposes of this regulation and regulations 8 to 10 each of the parts of an umbrella scheme (and not the scheme as a whole) shall be regarded as an authorised unit trust; and “umbrella scheme” has the same meaning as in section 468 of the Income and Corporation Taxes Act 1988(2).

(1)

1891 c. 39. Section 12 was amended by Part VI of Schedule 14 to the Finance Act 1971 (c. 68) and by section 9 of, and Part I of Schedule 3 to, the Finance Act (Northern Ireland) 1971 (c. 27).

(2)

Section 468 was amended by section 52(2) of, and Part IV of Schedule 19 to, the Finance Act 1990, section 32(3) of the Finance (No. 2) Act 1992 (c. 48), section 113(1) and (2) of, and paragraph 3 of Schedule 14 and Part V(13) of Schedule 26 to, the Finance Act 1994 (c. 9), and paragraph 10(1) of Schedule 6 to the Finance Act 1996.