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Limited liability partnerships, not having “issued share capital” like that of a company with limited liability, are nonetheless entitled to intra-group stamp duty relief
The District Court recently overturned a determination made by the Collector of Stamp Revenue (the Collector) who, while accepting that limited liability partnerships (LLPs) were bodies corporate, refused to grant intra-group stamp duty relief under section 45 of the Stamp Duty Ordinance (SDO)1.
The refusal was made on the grounds that the LLPs concerned, not having “issued share capital”, could not therefore be 90% associated with the transferee within the terms of section 45 of the SDO.
Adopting a purposive interpretation approach, the Court rejected the narrow interpretation adopted by the Collector and held that the term "issued share capital" should be accorded its ordinary and natural meaning.
The Court held that so long as (i) the participating or share capital of an LLP was “issued”, i.e., “having been legally given to (those entitled to the share capital) in a legally completed transaction”; and (ii) the share capital can be divided into quantifiable portions under the laws under which the LLP was incorporated, such capital qualified as “issued share capital” for the purposes of section 45 of the SDO.
This alert discusses the decision and its implications.
1John Wiley & Sons UK2 LLP and Wiley International LLC v Collector of Stamp Revenue DCSA 2/2021.