Indirect Demerger

Indirect Demerger

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A company has 1 shareholder and 2 tradeing activities.

They would like to separate the 2 activities into separate companies. 

Will distribution of one of the trades into a new company be exempt even if the new company has an additional shareholder? What is the maximum shareholding the newcomer can have to ensure the distribution is still exempt? 

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By gbuckell
02nd May 2013 18:00

Statutory demerger

I assume you are proposing a statutory demerger under CTA 2010 s1073 et seq. The recipient company can have other shareholders and there are no maximum or minimum levels.

Statutory demergers are not the most simple of transactions. Apart from the statutory demerger rules themselves there are other issues to consider. If you don't fully understand them I strongly recommend you seek professional advice.

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