3 Company reorganisations

3.1 General

Company reorganisations may be split into three main categories—reconstructions involving shares; reconstructions involving the transfer of a business; and demergers. Without special provisions, tax could arise on the shareholders and sometimes on the companies involved; therefore any pre-completion restructuring should involve advance clearance with HMRC. Clearance requires that the reconstruction is for bona fide commercial reasons and not part of tax avoidance arrangements1.

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