A large international telecoms company had carried out a demerger and carve-out of assets as part of a historic sale.  The restructured company was now being purchased.

A risk was identified of whether the historic demerger should have been subject to Portuguese stamp duty at 5% as the transfer of a business that is a going concern.  The risk was heightened due to an unhelpful recent ruling on a similar matter and the buyer was insisting on an indemnity for the issue, which the seller was resisting as it wanted a clean exit from the business.

The buyer secured a policy that covered the potential historic liability to Portuguese stamp duty on the demerger.  As a consequence the buyer no longer required an indemnity and the seller was able to make a clean exit.