PART IIIU.K.STAMP DUTY

Loan capital, letters of allotment etc.U.K.

[F180DRepurchases and stock lending: replacement stock on insolvencyU.K.

(1)This section applies where—

(a)A and B have entered into an arrangement falling within section 80C(1),

(b)the conditions in subsection (2A) or (3) of that section are met,

(c)stock is transferred to A or A's nominee, and

(d)the conditions in subsection (2) below are met.

(2)The conditions in this subsection are that—

(a)A and B are not connected persons within the meaning of [F2section 1122 of the Corporation Tax Act 2010],

(b)after B has transferred stock under the arrangement, A or B becomes insolvent,

(c)it becomes apparent (whether before or after the insolvency occurs) that, as a result of the insolvency, stock will not be transferred to B or B's nominee in accordance with the arrangement,

(d)the party who does not become insolvent (“the solvent party”) or the solvent party's nominee acquires replacement stock, and

(e)the replacement stock is acquired before the end of the period of 30 days beginning with the day on which the insolvency occurs (“the insolvency date”).

(3)Where collateral is provided under the arrangement (or under arrangements of which that arrangement forms part), stamp duty is not chargeable on any instrument transferring to the solvent party or the solvent party's nominee—

(a)replacement stock acquired using the collateral (whether directly or indirectly), or

(b)where the solvent party uses the whole of the value of the collateral to acquire replacement stock, any further replacement stock.

(4)Where no collateral is provided as mentioned in subsection (3), stamp duty is not chargeable on any instrument transferring replacement stock to the solvent party or the solvent party's nominee.

(5)Subsections (3) and (4) may apply as regards more than one instrument (and where those subsections apply as regards more than one instrument, the instruments may be executed by different persons).

(6)But those subsections apply only as regards replacement stock up to the amount of stock which will not be transferred as a result of the insolvency.

(7)An instrument on which stamp duty is not chargeable by virtue only of subsection (3) or (4) is not to be deemed to be duly stamped unless it has been stamped with a stamp denoting that it is not chargeable with any duty.

(8)Despite section 122(1) of the Stamp Act 1891, the stamp mentioned in subsection (7) may be a stamp of such kind as the Commissioners for Her Majesty's Revenue and Customs may prescribe.

(9)For the purposes of this section a person becomes insolvent—

(a)if a company voluntary arrangement takes effect under Part 1 of the Insolvency Act 1986,

(b)if an administration application (within the meaning of Schedule B1 to that Act) is made or a receiver or manager, or an administrative receiver, is appointed,

(c)on the commencement of a creditor's voluntary winding up (within the meaning of Part 4 of that Act) or a winding up by the court under Chapter 6 of that Part,

(d)if an individual voluntary arrangement takes effect under Part 8 of that Act,

(e)on the [F3making of a bankruptcy application or] presentation of a bankruptcy petition (within the meaning of Part 9 of that Act),

(f)if a compromise or arrangement takes effect under Part 26 [F4or 26A] of the Companies Act 2006,

(g)if a bank insolvency order takes effect under Part 2 of the Banking Act 2009,

(h)if a bank administration order takes effect under Part 3 of that Act,F5...

[F6(ha)if a special administration order takes effect under the Investment Bank Special Administration Regulations 2011, F7...]

[F8(hb)if a special administration order takes effect under the Payment and Electronic Money Institution Insolvency Regulations 2021, or]

(i)on the occurrence of any corresponding event which has effect under or as a result of the law of Scotland or Northern Ireland or a country or territory outside the United Kingdom.

(10)In this section—

• “collateral” means an amount of money or other property which is payable to, or made available for the benefit of, a party to an arrangement or that party's nominee for the purpose of securing the discharge of the requirement to transfer stock to that party or the nominee;

• “replacement stock”, in the event of a party to an arrangement becoming insolvent, is stock of the same kind as the stock which will not be transferred to the other party or that party's nominee as a result of the insolvency.]