Introduction Minimum consideration rule
57.Schedule 2A Paragraph 12 provides for a minimum consideration rule for pre-completion transactions (both assignments of rights and free-standing transfers) where there is a relevant connection between the parties (see paragraph 12(3)).
58.Sub-paragraph (2) provides that where there is a relevant connection between the parties in a pre-completion transaction, the amount of consideration for the ultimate or final acquisition is: (i) the consideration it would normally be in the absence of paragraph 12; or (ii) if higher, the first minimum amount (see paragraph 13); or (iii) if higher than both amounts in (i) and (ii) above, the second minimum amount (see paragraph 14).
59.Sub-paragraph (3) sets out the meaning of “relevant connection between the parties”. It provides that there is a “relevant connection between the parties” if: (i) the transferee and transferor in relation to a pre-completion transaction are connected with each other (see paragraph 20) or not acting at arm’s length; or (ii) sub-paragraph 4 applies.
60.Sub-paragraph (4) sets out how the relevant connection between the parties test should be applied where there are a series of pre-completion transactions. It applies if the transferor in a pre-completion transaction that precedes the implemented transaction (see paragraph 12(3)) is connected with or not acting at arm’s length to the transferee under that implemented transaction.
61.Sub-paragraph (5) sets out that references to the “original contract” in paragraph 13 and paragraph 14 where the implemented transaction forms part of a series of contracts with common subject-matter shall be read as a reference to the first contract in that series.