In M Group Holdings Ltd v HMRC [2021] UKFTT 69 (TC) (12 March 2021) the FTT held that a company which disposed of the shares in a new subsidiary following the hive-down of its trade and assets was not entitled to the substantial shareholdings exemption (SSE).
M Ltd was a stand-alone company wholly owned by one shareholder Mr J which provided services to the NHS. Mr J wished to sell the company’s business and undertook the following transactions. Firstly the company incorporated a wholly-owned subsidiary MCS Ltd and then transferred its trade and assets to it. M Ltd then sold its shares in MCS Ltd to a third-party purchaser.
M Ltd claimed that the gain arising from the sale was exempt under the SSE. As M Ltd only owned MCS Ltd for a period of just under 11 months...
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In M Group Holdings Ltd v HMRC [2021] UKFTT 69 (TC) (12 March 2021) the FTT held that a company which disposed of the shares in a new subsidiary following the hive-down of its trade and assets was not entitled to the substantial shareholdings exemption (SSE).
M Ltd was a stand-alone company wholly owned by one shareholder Mr J which provided services to the NHS. Mr J wished to sell the company’s business and undertook the following transactions. Firstly the company incorporated a wholly-owned subsidiary MCS Ltd and then transferred its trade and assets to it. M Ltd then sold its shares in MCS Ltd to a third-party purchaser.
M Ltd claimed that the gain arising from the sale was exempt under the SSE. As M Ltd only owned MCS Ltd for a period of just under 11 months...
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