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Britain says scraps share tax after HSBC court win

Source: Reuters - Thu 1st Oct 2009

Britain said it scrapped a tax on share transactions on Thursday after the European Union's top court ruled it breaks EU law, leaving an already cash-strapped British treasury facing a huge refund bill from companies.

Britain's Revenue and Customs said it would stop levying the stamp duty reserve tax immediately but may come back with new rules.

"The government's policy position remains that transactions involving UK shares should bear their fair share of tax" a Revenue and Customs spokesman said.

The European Court of Justice ruled in a case involving HSBC bank that a stamp duty on shares newly issued in one EU state and distributed through a clearing system in another state as part of a takeover deal should not be subject to the tax.

Europe's biggest bank, HSBC argued in the court that when it bought French rival CCF in 2000, it had to pay a 1.5 percent British stamp duty reserve tax totalling 27 million pounds ($43.04 million) on new shares it offered to CCF shareholders through a French clearing service.

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