The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note considers the capital gains tax implications where shares are sold in exchange for new shares.
The consideration paid by a purchasing company to the shareholder(s) for their shares in a target company could be in the form of either:
This guidance note covers the tax implications of consideration in the form of shares or a mixture of shares and cash. For details on the tax implications of consideration in the form of loan notes, see the Loan notes and Qualifying Corporate Bonds (QCBs) and non QCBs guidance note.
The timing of the consideration also needs to be considered. Consideration may be paid straight away or it may be deferred. Deferred consideration may be fixed or the amount may be variable. For more information on these, see the Tax treatment of earn-outs and deferred consideration guidance note.
Where shareholders disposing of their shares receive shares in the acquiring company, CGT is deferred if the acquiring company gets more than 25% of target company’s shar
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