Oliver Walker and Akash Mehta (Weil, Gotshal & Manges) consider the current status of the TCGA 1992 s 137 main purpose test.
It is a longstanding feature of private equity transactions for share sale consideration to consist partly of cash and partly of shares or loan notes issued by the buyer. These securities can help to bridge the gap between seller and buyer pricing expectations reduce reliance on increasingly expensive third party financing and align the sellers’ interests in the target’s future success with those of the buyer. Conventionally UK sellers receiving such consideration would be able to defer taxation on the sale of their old shares until disposal of the new securities. Recent decisions have provided useful guidance on the availability of this relief in the UK and in particular the scope of the condition that the exchange of securities not form part...
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Oliver Walker and Akash Mehta (Weil, Gotshal & Manges) consider the current status of the TCGA 1992 s 137 main purpose test.
It is a longstanding feature of private equity transactions for share sale consideration to consist partly of cash and partly of shares or loan notes issued by the buyer. These securities can help to bridge the gap between seller and buyer pricing expectations reduce reliance on increasingly expensive third party financing and align the sellers’ interests in the target’s future success with those of the buyer. Conventionally UK sellers receiving such consideration would be able to defer taxation on the sale of their old shares until disposal of the new securities. Recent decisions have provided useful guidance on the availability of this relief in the UK and in particular the scope of the condition that the exchange of securities not form part...
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If you do not subscribe but are a registered user, please enter your details in the following boxes:
