½Û×ÓÊÓÆµ

Reconstructions

Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance

Reconstructions

Produced by a Tolley Corporation Tax expert
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 (TCGA 1992, s 136) and reconstructions involving the transfer of a business (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 share capital

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Powered by

Popular Articles

SEIS and EIS ― overview

SEIS and EIS ― overviewThe seed enterprise investment scheme (SEIS) and enterprise investment scheme (EIS) are very similar schemes which offer substantial tax incentives to investors in companies which qualify. The tax incentives for SEIS and EIS investments are intended to encourage investment in

14 Jul 2020 13:31 | Produced by Tolley Read more Read more

Long service awards

Long service awardsEmployee recognition by an employer can be an important motivational tool, as well as having a positive effect on retention. Most employer awards made to an employee are treated as taxable earnings under ITEPA 2003, s 62 or as a benefit under ITEPA 2003, s 201 because they are

14 Jul 2020 12:11 | Produced by Tolley Read more Read more

Overseas property businesses for companies

Overseas property businesses for companiesOverviewReal estate income is generally taxed where the property is located; the UK tax treaties generally allow the jurisdiction where the land is located to tax income from the land.Therefore, a UK company with overseas property may be subject to tax in

14 Jul 2020 12:22 | Produced by Tolley in association with Rob Durrant-Walker of Crane Dale Tax, part of AMS Group Read more Read more