Reconstructions

Copyright © 2026 LexisNexis
Produced by Tolley in association with Nick Wright
Corporation Tax
Guidance

Reconstructions

Copyright © 2026 LexisNexis
Produced by Tolley in association with Nick Wright
Corporation Tax
Guidance
imgtext

Sometimes a reorganisation will be more complex than a simple share for share exchange. The ‘paper for paper’ rules relating to share for share exchanges (discussed in the Share for share exchange guidance note) are therefore extended to deal with reconstructions. What constitutes a scheme of reconstruction is discussed in detail below.

Relief is available to shareholders where there is a reconstruction involving the issue of shares and then also either a scheme of arrangement with the members or the transfer of a business. These are considered in more detail below.

More complicated reconstructions are also used when a demerger process is being undertaken. These are discussed in the demergers series of guidance notes, see the Demergers ― overview guidance note as a starting point.

Scheme of reconstruction

Both reconstructions involving a scheme of arrangement (see TCGA 1992, s 136) and reconstructions involving the transfer of a business (see TCGA 1992, s 139) require us to look at TCGA 1992, Sch 5AA for the definition of a ‘scheme of reconstruction’.

This says:

  1. •

    the scheme involves the issue of ordinary

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Nick Wright
Nick Wright linkedinicon

Director, Jerroms Miller

As a member of the ICAEW and CIOT Nick specialises in technical corporate tax planning and company reorganisations advising on a variety of projects from mergers and acquisitions, management buyouts and demergers to venture capital schemes (EIS/SEIS) and employee incentives including share schemes.Nick is a regular writer for various tax journals with articles published in Taxation, Tax Adviser and ICAEW Taxline. He also contributes to Tolley's Tax Planning.Presenting regular lectures to fellow professionals through various CPD providers including MBL, CPDStore and a variety of CIOT branches.Nick is host of the Jerroms Miller Tax Hour podcast.

Read moreRead more
Powered by Tolley+™
  • 06 Jul 2026 09:00

Home/ Tolley Tax Guidance/ Corporation Tax / Reorganising a company or group

Popular Articles

Value Added Tax

Exemption ― burial and cremation

Exemption ― burial and cremationThis guidance note provides an overview of the VAT treatment of services that are provided in connection with the burial or cremation of human remains.VAT treatmentThe following services are exempt from VAT:•the disposal of the remains of the dead•making arrangements

14 Jul 2020 11:38 | Produced by Tolley Read more Read more

Classes of NIC and who pays them

Classes of NIC and who pays themClass 1 NICClass 1 NIC is payable on earnings paid to an employed worker which derive from, or are treated as deriving from, an employed earner’s employment in the UK. There are two kinds of Class 1 NIC, primary contributions for which the employee is liable and

Read more Read more
Personal Tax

Interest and penalties on late paid tax under self assessment

Interest and penalties on late paid tax under self assessmentInterestIf the capital gains tax, the balancing payment or payments on account of tax and / or Class 4 national insurance contributions (NIC) are paid late, HMRC will charge interest on the amount overdue from the original due date. The

14 Jul 2020 12:00 | Produced by Tolley Read more Read more