The Finance Bill proposes a number of changes to the substantial shareholdings exemption. Sara Luder and Kyle O’Sullivan (Slaughter and May) investigate.
The HM Treasury 2016 consultation on reforming the SSE was a timely review of an exemption that has been on the statute book for 15 years. Whilst the consequential changes in the Finance Bill (when eventually enacted) are to be welcomed the exemption is still not without its complexities.
What is the SSE?
The SSE exempts companies from corporation tax on gains arising on the disposal of a substantial shareholding in another company.
Interestingly when the legislation was introduced the draftsman was concerned to ensure that companies were not able to engineer disposals to fall outside of the SSE when they generated a capital loss thus having the best of both worlds. This concern explains some of the complexity in the legislation.
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The Finance Bill proposes a number of changes to the substantial shareholdings exemption. Sara Luder and Kyle O’Sullivan (Slaughter and May) investigate.
The HM Treasury 2016 consultation on reforming the SSE was a timely review of an exemption that has been on the statute book for 15 years. Whilst the consequential changes in the Finance Bill (when eventually enacted) are to be welcomed the exemption is still not without its complexities.
What is the SSE?
The SSE exempts companies from corporation tax on gains arising on the disposal of a substantial shareholding in another company.
Interestingly when the legislation was introduced the draftsman was concerned to ensure that companies were not able to engineer disposals to fall outside of the SSE when they generated a capital loss thus having the best of both worlds. This concern explains some of the complexity in the legislation.
Before...
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:
