Business Restructuring and Stamp Duty: A Risk That’s Easy to Miss

Business restructures are usually driven by sensible commercial reasons. Growth, simplification, succession planning, or preparing for sale. What often gets overlooked in the process is stamp duty.

This isn’t because people don’t care. It’s because stamp duty doesn’t always feel relevant when no money is changing hands. Unfortunately, that’s exactly where problems start.

We regularly see restructures that looked fine at the time but created stamp duty exposure that only surfaced years later, often at the worst possible moment.

Why stamp duty is so often forgotten during restructures

Restructures are usually complex and fast-moving. The focus is on:

• Legal structure
• Corporation tax
• Commercial outcomes

Stamp duty is often treated as an afterthought, or assumed to be covered elsewhere. In reality, it can fall between advisers, with no one fully owning it.

Where assets or shares move within a group, it’s common to assume stamp duty doesn’t apply because it’s “internal”. That assumption is one of the biggest causes of issues we see.

When can stamp duty apply in a restructure?

Stamp duty can arise in restructures involving:

• Transfers of shares or partnership interest between companies or individuals
• Changes in ownership structure
• Group reorganisations
• Insertion or removal of holding companies

Even where no cash is paid, stamp duty can still apply depending on how the transaction is structured and documented.

Each restructure is different, which is why blanket assumptions rarely hold up.

Common restructuring scenarios that cause problems

Some of the most common situations we see include:

Internal share transfers

Shares moved between group companies or shareholders are often treated informally. These transfers are frequently missed for stamp duty purposes.

Pre-sale restructures

Restructures carried out ahead of a sale are often rushed. Stamp duty issues only surface later during buyer due diligence.

Historic restructures

Changes made years ago may not have been reviewed properly at the time. These are often uncovered when new advisers are brought in.

Poor documentation

Even where the intention was correct, weak or unclear paperwork can create stamp duty exposure later.

Why problems usually appear years later

Stamp duty issues rarely cause immediate disruption. Instead, they sit quietly in the background.

They’re most commonly discovered during:

• A business sale
• A funding round
• A group reorganisation
• Due diligence by buyers or investors

At that point, fixing the issue can delay deals, increase costs, and create unnecessary stress.

Can stamp duty issues from restructures be fixed?

In many cases, yes, but earlier is always better.

Where issues are identified proactively, there is usually more flexibility and far less risk of penalties escalating. Where problems are discovered late, options can be limited.

This is why reviews are particularly valuable before any major corporate event.

When should you get a restructure reviewed?

A stamp duty review is especially sensible if:

• You’re planning a restructure
• You’ve completed a restructure in the past
• You’re preparing for sale or investment
• The documentation is unclear or incomplete

Even a short review can provide clarity and reassurance.

Why specialist advice matters here

Stamp duty in restructures is rarely black and white. It requires someone to look at:

• What actually happened
• How it was documented
• Whether stamp duty applied
• Whether reliefs were available

At SCA Tax, this is a core part of what we do. We focus specifically on stamp duty so it doesn’t become an unexpected issue later.

FAQs

Does stamp duty apply if no money changes hands?

 It can. The absence of cash doesn’t automatically remove the liability.

Can old restructures still be reviewed?

 Yes. In fact, they often should be, particularly before a sale.

Is a review disruptive?

 No. It’s usually a focused and practical exercise.

Final thoughts

Stamp duty is one of the easiest things to miss in a business restructure, and one of the most expensive to fix later.

If you’ve restructured a business or are planning to, it’s worth checking the stamp duty position properly.