This guidance note summarises some of the ways in which companies may reorganise their activities and some of the key tax considerations.

Demergers

Groups may want to split out their activities for many different reasons. There may be conflicting interests between shareholders, legal reasons to separate a trade out from the rest of the group with corporate protection, or it may be the only way for a purchaser to be able to buy certain parts of the business.

The term 'demerger' covers several possible structures:

  • demerger by reconstruction / Insolvency Act 1986, s 110 demerger (subscription sensitive)
  • statutory demerger
  • demerger by way of reduction of share capital

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