UK moves to close M&A tax loophole

The UK Inland Revenue has acted to close what it sees as a loophole in tax law that allows companies involved in international mergers and acquisitions to avoid a 1.5% tax. A number of recent transactions, including the BP/Amoco merger, the Astra/Zeneca merger and the Vodafone/Airtouch deal, were structured to benefit from an exemption which allowed the companies to avoid the 1.5% stamp duty reserve tax.