Stamp Duties Consolidation Act 1999 section 88B

Example

Luxembourg Growth SICAV is a Luxembourg-domiciled collective investment vehicle holding a portfolio of European equities valued at €120 million. Its promoter decides to migrate the fund to Ireland in order to consolidate its European operations onto a single Irish platform.

A scheme of reconstruction is put in place under which Luxembourg Growth SICAV transfers all of its assets to Irish Growth ICAV, an Irish authorised investment undertaking falling within section 739B of the Taxes Consolidation Act 1997. In consideration, Irish Growth ICAV issues new units in itself directly to the unit holders of Luxembourg Growth SICAV, allocated in proportion to each holder's existing interest in the Luxembourg fund.

The transfer agreement and the related instruments of assignment and unit issuance would, but for section 88B, be chargeable to stamp duty as conveyances on sale of the underlying assets. Because the arrangement is carried out for the purposes of a scheme of reconstruction between a foreign fund and a domestic fund, and Irish Growth ICAV issues its units to the unit holders of Luxembourg Growth SICAV in proportion to their existing holdings, the instruments fall squarely within section 88B and no stamp duty is chargeable.

The result would be the same if Irish Growth ICAV had instead issued its units directly to Luxembourg Growth SICAV, or if the direction of the reorganisation were reversed so that an Irish fund migrated its assets to a foreign fund.