Chris Holmes and Ross Robertson (BDO) explain how international aspects can complicate demergers and what tax issues to look out for.
Demergers are complex corporate transactions that aim to split two or more businesses into separate ownership. Under UK tax and company law it may be possible to achieve a tax-neutral demerger through the use of a statutory demerger (direct or indirect) a s 110 liquidation demerger or a capital reduction demerger. Other simpler methods may also be possible where mathematically the taxes arising are minimal.
Demergers – arguably one of the most complex types of corporate transaction – become even more complicated when international elements are involved. International aspects do carry additional risk but they can also create opportunities. The important point is that the implications of undertaking a demerger with international aspects must be fully and specifically considered.
Common international aspects that...
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Chris Holmes and Ross Robertson (BDO) explain how international aspects can complicate demergers and what tax issues to look out for.
Demergers are complex corporate transactions that aim to split two or more businesses into separate ownership. Under UK tax and company law it may be possible to achieve a tax-neutral demerger through the use of a statutory demerger (direct or indirect) a s 110 liquidation demerger or a capital reduction demerger. Other simpler methods may also be possible where mathematically the taxes arising are minimal.
Demergers – arguably one of the most complex types of corporate transaction – become even more complicated when international elements are involved. International aspects do carry additional risk but they can also create opportunities. The important point is that the implications of undertaking a demerger with international aspects must be fully and specifically considered.
Common international aspects that...
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