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Commentary

265 Direct demergers

COMPANIES vol 11 acquisitions, mergers, demergers
| Commentary

265 Direct demergers

| Commentary

(b) Capital gains tax

265 Direct demergers

Successfully avoiding the effects of Section 1000 of the Corporation Tax Act 2010 does not mean that the shareholders’ tax problems are over. If the value of the shares issued or transferred to them under the terms of the reconstruction is greater than the amount originally paid for those shares, then that ‘profit’ will now fall within the capital gains tax regime. The tax effects depend upon whether the reconstruction takes the form of a direct demerger or some other form.

In the case of direct demergers, Section 122 of the Taxation of Chargeable Gains

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