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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Parway Estates Ltd v Commissioners of Inland Revenue [1957] EWHC TC_45_135 (Ch) (13 December 1957)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/1957/TC_45_135.html
Cite as: 45 TC 135, [1957] EWHC TC_45_135 (Ch), (1957) 45 TC 135
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Stamp duty-Conveyance or transfer on sale-Exemption-Transfer between associated companies-Property transferred by subsidiary to principal company after latter had contracted to sell its shares in subsidiary-Vendor of shares required by sale agreement to do certain things before completion-Whether transferee still "beneficial owner" of shares in transferor-Stamp Act 1891 C (54 & 55 Viet. c. 39), Sch. 1; Finance Act 1930 (20 - 21 Geo. 5, c. 28), j. 42.
On 12th January 1956 the Appellant Company agreed to sell to a third party the share capital of a wholly-owned subsidiary which had accumulated losses qualifying for relief from income tax. Under the agreement the Appellant was required before completion to purchase the subsidiary's assets and procure the discharge of its liabilities. Accordingly, on 28 th February 1956 two instruments D were executed whereby the subsidiary's interests in certain leasehold properties were assigned or transferred to the Appellant. On 29th February 1956 transfers of the shares to the purchaser were executed in consideration of the payment by him of the sum due under the agreement.
The Appellant Company contended that the transfers relating to the leasehold properties were exempt from ad valorem stamp duty on the ground that when they E were executed it (being the transferee) was the beneficial owner of more than 90 per cent, of the issued share capital of the transferor. The Commissioners of Inland Revenue were of opinion that having regard to the terms of the agreement for the sale of the shares the Appellant Company had ceased to be the beneficial owner thereof, and assessed the transfers to ad valorem duty.
Held, that the equitable and beneficial interest in the shares became vested F in the purchaser when the agreement for sale was signed.
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