Commentary

52.5 HMRC’s current guidance on ratchets

COMPANIES vol 11 acquisitions, mergers, demergers
| Commentary

52.5 HMRC’s current guidance on ratchets

| Commentary

52.5 HMRC’s current guidance on ratchets

HMRC state1 that where shares are acquired under arrangements consistent with those described in Sections 1–5 of the BVCA/HMRC 2003 Memorandum then, where there is a ratchet operating at an ‘exit’, no Chapter 4 benefit charge will arise on the disposal of those shares or, if earlier, on operation of the ratchet. Where in addition, the ratchet meets all the conditions in paragraph 6(2)(a) and (b) of the Memorandum, any gains realised on exit will be subject to capital gains tax only and not to income tax and national insurance contributions. Where

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