Substantial shareholdings exemption (SSE) definition

View the related practice notes about Substantial shareholdings exemption (SSE)

Share for share exchanges and qualifying corporate bonds (QCBs)

Share for share exchanges and qualifying corporate bonds (QCBs) Some company acquisitions that involve a corporate buyer will be structured so that the consideration payable is the issue of new shares and/or loan notes by the buying company. The selling shareholders exchange their existing shares for new shares and/or loan notes issued by the corporate buyer instead of, or as well as, receiving cash. This Practice Note is about the tax treatment of the selling shareholders and the buying company in this type of transaction. This acquisition structure clearly has a cash flow advantage for the buyer but, where certain conditions are satisfied, the exchange of securities is also treated as a form of reorganisation for tax purposes and no capital gains tax (or corporation tax on chargeable gains) charge is triggered for the sellers at the time the share sale is completed (or if the consideration is partly cash, no tax charge is triggered to the extent that the consideration is made up of shares or loan...

Tax reliefs for schemes of reconstruction

Tax reliefs for schemes of reconstruction Tax relief for chargeable gains is available for both: • the shareholders of a company (the shareholder tax relief), and • the company itself (the company tax relief) under a scheme of reconstruction provided certain statutory conditions are met. In summary, the shareholder tax relief provides that the shareholders of the reconstructed company are deemed for tax purposes as not having made a disposal of their shares and the company tax relief provides that the reconstructed company does not realise a gain or a loss on the transfer of its business. Although, as a result of the company tax relief, the reconstructed company will not realise a chargeable gain or allowable loss, it may be liable for other tax charges (and other reliefs) besides those arising under the chargeable gains rules. These are outside the scope of this Practice Note but the following may be relevant: • tax charges under the rules on intangible fixed assets, see Practice Note: Intangible fixed assets...