This guidance note gives an overview of the steps and tax implications of a statutory demerger. For an overall introduction to demergers, see the Demergers - overview guidance note.

Where the qualifying conditions are met, statutory demergers enable businesses to demerge in a tax efficient manner without having to liquidate the original company as in a liquidation demerger. In a statutory demerger, the distribution of assets to shareholders is an 'exempt distribution'. Other tax reliefs should reduce or remove other potential tax liabilities. Particular care must be taken where a statutory demerger has been effected that reliefs are not withdrawn as a result of any chargeable payments in the five years following the demerger. This is considered in more detail below.

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


Already a subscriber? Login

Request a Free Trial to TolleyGuidance to gain access to the full article

Access this article and thousands of others like it free for 7 days. Written exclusively by tax professionals for tax professionals, TolleyGuidance combines tax technical commentary with practical guidance to support you day-to-day.

* denotes a required field