Section 53 Finance Act 2003 applies to all transfers between a vendor (individual or company) and a company connected to them, when the company is the purchaser. The chargeable consideration for such transfers will be not less than the market value at the effective date, of the property transferred, irrespective of the consideration (or lack of it) actually passing.

S53 also has effect where a vendor (individual or company) transfers property to a company and some or all of the consideration for that transfer consists of the issue or transfer of shares in a company with which the vendor is connected.

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