Jeanette Zaman and Emma Game (Slaughter and May) consider whether the conditions for demergers to qualify as exempt distributions are in need of an overhaul
elief under the exempt distribution provisions in CTA 2010 Part 23 Chapter 5 may apply to a demerger structured as either a direct dividend demerger or an indirect dividend demerger (see below for more detail on the mechanics of the two structures).
Where exempt demerger relief applies a distribution of assets to shareholders does not give rise to an income tax charge; instead they should expect a capital gains rollover. The distributing company should not suffer a chargeable gain on the disposal if the substantial shareholding exemption applies (or in the case of an indirect dividend demerger if rollover relief applies). Furthermore de-grouping charges are turned off for the demerging companies when they leave the distributing company’s group.
umerous strict conditions and...
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Jeanette Zaman and Emma Game (Slaughter and May) consider whether the conditions for demergers to qualify as exempt distributions are in need of an overhaul
elief under the exempt distribution provisions in CTA 2010 Part 23 Chapter 5 may apply to a demerger structured as either a direct dividend demerger or an indirect dividend demerger (see below for more detail on the mechanics of the two structures).
Where exempt demerger relief applies a distribution of assets to shareholders does not give rise to an income tax charge; instead they should expect a capital gains rollover. The distributing company should not suffer a chargeable gain on the disposal if the substantial shareholding exemption applies (or in the case of an indirect dividend demerger if rollover relief applies). Furthermore de-grouping charges are turned off for the demerging companies when they leave the distributing company’s group.
umerous strict conditions and...
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