Demergers are popular as a way of separating trades / businesses (including investment businesses) in a tax efficient manner. They can be used in preparation for a sale, prior to an investment, or just as a commercial strategy to ring-fence one business or asset base from another. Broadly, provided they are correctly structured they can allow for this with no or minimal tax leakage. Over time...
Read moreTax Bite – Stamp Duty on inserting a new holding company This Tax Bite follows on from our Bite of 24 June, covering topical tax issues on demergers. As we explained in that Bite, there is a stamp duty relief, known as section 77 relief, which can apply where a new holding company is placed on top of an existing company / group, which is typically the first step in a demerger or other...
Read moreDemergers are popular from a tax perspective as, broadly speaking, provided they are correctly structured they can allow for the separation of trades / businesses (including investment businesses) with no or minimal tax leakage. This can allow one trade to be sold, attract investment or be ring-fenced separately from another trade or business / asset. In the current business and economic climate,...
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