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Has anyone a view on the application of s839(6) and (7) where you have a company owned 50/50 by two indivduals?
I am looking at these provisions in connection with the the SDLT partnership rules of Schedule 15, and I am trying to determine whether the individuals are connected with the company. If they are connected para 10 will apply and the SDLT will be considerably reduced.
As far as I know there this no outright control of the company by either individual. The two individual shareholders (who are also directors) work closely together and have always agreed on how the company is run. Is this sufficient for them to be ‘acting together..etc’?
Any views greatly appreciated.
It is likely that the two shareholders would have to act together because otherwise the company would be deadlocked. Therefore in the absence of any funny share rights given to one and not the other you can assume here that the two shareholders are connected with the company especially in view of the provisions of s416 and 417 and see also Steele v EVC [1996] STC 785 but if you wish to put the matter beyond doubt have then enter into a short shareholders’ agreement confirming that they must act together to control the company.
