Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017 Schedule 17 para 2

Reconstruction relief

Schedule 17, paragraph 2 provides relief from land transaction tax where a company acquires the whole or part of another company's undertaking as part of a reconstruction scheme, provided specific conditions about share consideration and shareholder proportionality are met.

• Where a company acquires all or part of another company's undertaking under a reconstruction scheme, any land transaction connected with that transfer may be relieved from land transaction tax, known as "reconstruction relief".
• The first condition requires that the consideration for the acquisition consists wholly or partly of the issue of non-redeemable shares in the acquiring company to all shareholders of the target company; if only partly in shares, the remainder must consist entirely of the acquiring company assuming or discharging the target company's liabilities.
• The second condition requires that, after the acquisition, each shareholder of either company is also a shareholder of the other, and each shareholder holds the same (or as near as possible the same) proportion of shares in both companies.
• Reconstruction relief is subject to withdrawal under paragraph 5 of Schedule 17, meaning the relief can be clawed back if certain subsequent events occur.