Share for share exchange

Produced by Tolley in association with Nick Wright
Corporation Tax
Guidance

Share for share exchange

Produced by Tolley in association with Nick Wright
Corporation Tax
Guidance
imgtext

This guidance note considers the capital gains tax (CGT) and corporation tax on capital gains implications where shares are sold in exchange for new shares.

Possible types of consideration for share purchases

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:

  1. new shares in the purchasing company in exchange for shares in the target company (a ‘share for share exchange’)

  2. cash

  3. loan notes issued by the purchasing company

  4. a mixture of the above

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

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+™
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.

Powered by Tolley+
  • 06 Jul 2026 09:00

Popular Articles

First year allowances

First year allowancesFirst year allowances (FYAs) are available on the following items:•first-year relief on qualifying new main rate plant and machinery (at 100%, which is described by HMRC as ‘full expensing’) and special rate assets (at 50%) from 1 April 2023 (companies only). These FYAs were

14 Jul 2020 11:41 | Produced by Tolley Read more Read more

Research and development (R&D) relief ― overview

Research and development (R&D) relief ― overviewThis guidance note provides an overview of the research and development (R&D) tax reliefs for companies.See the Research and development tax relief summary diagram which summarises the R&D tax relief.See also Simon’s Taxes D1.401.For a factsheet which

14 Jul 2020 12:22 | Produced by Tolley in association with Will Sweeney Read more Read more

VAT registration ― artificial separation of business activities (disaggregation)

VAT registration ― artificial separation of business activities (disaggregation)This guidance note should be read in conjunction with the VAT registration ― compulsory guidance note and is relevant to persons established or resident in the UK. Persons that are not established or resident in the UK

14 Jul 2020 13:57 | Produced by Tolley Read more Read more