Following extensive consultation draft clauses for the simplification of the capital gains exit charge were published on 9 December.
The main proposals are:
The charge will increase (or decrease) the gain in the vendor company rather than creating a gain in the company being sold. Any reliefs or exemptions applicable to the sale by the vendor would therefore apply to the degrouping element of the gain;
An amendment to the substantial shareholdings exemption (SSE) will permit companies to package up trades into new subsidiaries for sale;
Degrouping charges are unchanged where there is no disposal; and
There will be a just and reasonable escape clause from the degrouping charge.
Effect of the provisions
The new mechanism means that where a transaction doesn’t prima facie carry a tax charge the degrouping charge shouldn’t be a barrier...
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Home >Articles > Reviewing the draft rules on capital gains exit charges
Reviewing the draft rules on capital gains exit charges
Pete Miller on chargeable gains exit charges
The proposals in brief
Following extensive consultation draft clauses for the simplification of the capital gains exit charge were published on 9 December.
The main proposals are:
The charge will increase (or decrease) the gain in the vendor company rather than creating a gain in the company being sold. Any reliefs or exemptions applicable to the sale by the vendor would therefore apply to the degrouping element of the gain;
An amendment to the substantial shareholdings exemption (SSE) will permit companies to package up trades into new subsidiaries for sale;
Degrouping charges are unchanged where there is no disposal; and
There will be a just and reasonable escape clause from the degrouping charge.
Effect of the provisions
The new mechanism means that where a transaction doesn’t prima facie carry a tax charge the degrouping charge shouldn’t be a barrier...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
