Demerger clearances

By Tolley
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The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Demerger clearances
  • Non-statutory demergers
  • Statutory demergers
  • Reporting requirement

This guidance note contains specific comments on clearance applications as they refer to non-statutory and statutory demergers, and should be read in conjunction with the general guidance on drafting clearance applications in the Statutory clearances and Non statutory clearances guidance notes.

For overall guidance on demergers, including choice of the most appropriate route and planning the demerger project, see the Demergers - overview guidance note.

Non-statutory demergers

A non statutory demerger may involve several steps in order to achieve the desired result. These will differ depending on the circumstances but typically will require clearance under the following provisions:

  • TCGA 1992, s 139 (reconstruction relief for corporate capital gains)
  • TCGA 1992, s 138 (reconstruction relief from capital gains tax for shareholders under TCGA 1992, s 136)
  • CTA 20

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