The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note deals with the tax consequences for shareholders and companies involved in either a ‘Type 2’ or ‘Type 3’ ‘Indirect’ Statutory demerger. For an introduction to Statutory demergers, including an overview and diagrams of the three permitted types of demerger, conditions for a statutory demerger, chargeable payments and clearances and reporting, see the Statutory demergers ― introduction guidance note.
For overall guidance on demergers, including choice of the most appropriate route and planning the demerger project, see the Demergers ― overview guidance note.
Statutory demergers are sometimes referred to as ‘Exempt demergers’.
A ‘Type 2’ indirect demerger involves the transfer by all or some of the shareholders of the 75% trading subsidiaries’ trades instead of the shares to the new companies set up by shareholders. Consideration is in the form of shares in the new companies.
This may be illustrated as follows:
In a 'Type 3' indirect demerger, some or all of the shareholders set up new companies to acquire shares in separate 75% subsidiaries
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