Encountering intangibles: some practical suggestions

As HMRC’s consultation on the intangibles code comes to an end (on 11 May 2018) this article highlights some of the issues that might be encountered under the current rules by those implementing transactions in advance of any future improvements to the regime. I focus on three tricky areas: pre-sale reorganisations; break-up structures; and companies operating through partnerships.

Pre-sale reorganisations

The problem with intangibles on a pre-sale reorganisation is the degrouping charge; more specifically the inability to shelter a CTA 2009 s 780 charge using the substantial shareholding exemption (SSE). This conflicts with the position for chargeable gains assets (which of course includes pre-2002 intangibles and in particular goodwill in many businesses). Since 2011 it has been possible to eliminate CGT degrouping charges on a...