Reconstructions

Produced by a Tolley Corporation Tax expert

Corporation Tax

Guidance

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

Access this article and thousands of others like it
free for 7 days with a trial of TolleyGuidance.

TAKE A FREE TRIAL

Popular Articles

Personal Tax

Income tax losses ― overview

Income tax losses ― overviewIncome tax losses can arise due to a number of reasons, but not all losses can be relieved against total income and some losses can only be set against certain types of component income. The table below is a summary of the main reliefs for income tax losses.Summary of

04 Mar 2021 12:19 | Produced by Tolley Read more

Trusts and Inheritance Tax

Outright gifts

Outright giftsAn outright gift is the most straightforward type of gift. It simply involves the outright transfer of property from one person to another with no conditions attached.This type of gift is most suitable for clients who want to pass over modest amounts, or give to responsible and capable

14 Jul 2020 12:22 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Owner-Managed Businesses

Trade or hobby

Trade or hobbyInteraction of hobby farming rules and commercialityFarming has its own set of ‘hobby farming rules’, which historically have stated that a profit must be made every six years. This is known as ‘the five-year rule’, in that there can be five years of losses but there must be a profit

14 Jul 2020 13:50 | Produced by Tolley Read more

UU��ֱ��