| Commentary

3.4 Demergers

| Commentary

3.4 Demergers

A demerger under the Corporation Tax Act 2010 Section 1075 is a reorganisation where trading activities of a company or group (the distributing company) are transferred directly to its shareholders (either as a trade or involving the transfer of shares). This is referred to as an exempt distribution1. There is no tax on the distribution, there will be no chargeable gain at the time of the distribution and there will be no de-grouping charges under the Taxation of Chargeable Gains Act 1992 Section 179. Advance clearance with HMRC is required.

The several forms of a demerger

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