Tax Aspects of Mergers & Demergers

Introduction

The taxation of corporate transactions is complex but, if properly understood, can ensure that commercial transactions are not encumbered by unwarranted tax liabilities.

This series of short webinars, will take you through the basic tax rules for company reorganisations, mergers and demergers and other forms of corporate and group reconstructions and demonstrate how they work in practical situations. If you are outside of the UK and have clients who are doing business through UK companies and groups this session will help you to understand the UK rules.

What You Will Learn

The modules will cover the following areas:

• Reorganisations of share capital
• What is a reorganisation of share capital?
• Case law
• Bonus issues and rights issues
• Reductions of capital
• Company law
• Returns of capital
• Dividend block planning
• Anti-avoidance legislation
• Share exchanges
• Tax treatment of share exchanges
• Conditions
• Why we do them
• Company law aspects
• Anti-avoidance rules
• Companies without share capital
• Stamp duty on exchanges
• Mergers by share exchange
• Management buy-outs
• What is a management buy-out?
• Basic structures
• Business Asset Disposal relief
• Employment-related securities
• Use of loan notes and alternatives
• Demergers
• What is a demerger?
• Why do we do them?
• Basic structures
• Direct demergers
• Schemes of reconstruction
• History
• Current definitions of reconstructions
• Anatomy of a scheme of reconstruction demerger
• Tax reliefs and schemes of reconstruction
• Mergers reprise
• Demerger mechanisms
• Liquidations
• Exempt distributions
• Reductions of capital
• Stamp duty and demergers
• Stamp duty land tax issues

This webinar was recorded on 12th March 2021