41 Exclusion for reorganisations in the context of a winding upThere is an exclusion from the definition of ‘distribution’ for ‘distributions made in respect of share capital in a winding up’1. Thus, the issue of shares by the acquiring company to the shareholders of the target company in a reorganisation effected under Section 110 of the Insolvency Act 19862 will not constitute a distribution to those shareholders for tax purposes and will be taxed as capital.
There is an exclusion from the definition of ‘distribution’ for ‘distributions made in respect of share capital in a winding up’1. Thus, the issue of shares by the acquiring company to the shareholders of the target company in a reorganisation effected under Section 110 of the Insolvency Act 19862 will not constitute a distribution to those shareholders for tax purposes and will be taxed as capital.
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