Limited Recourse Finance Series, Part 4: Other Common Issues In Limited Recourse Structures

In the final part of this four-part series, we explore some of the common issues that may arise in limited recourse structures, as well as ways to address or mitigate the risks and costs.

Intra-Group Transfers - Stamp Duty Land Tax (SDLT)

For some portfolio companies, one of the due diligence issues for the lender is to ask whether properties and/or companies were subject to intra-group transfers as a result of corporate restructure, or whether there are any plans to do so during the term of the loan. Although intra-group real estate transfers are generally not subject to UK stamp duty on the basis that SDLT intra-group relief applies¹, this relief would be subject to clawback where (among other things) the Transferee leaves the SDLT group within three years of the transfer of the property.²