S162 Question

S162 Question

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We have just taken on a client who got clearance from HMRC on a s162 incorporation and whilst there are a few things we don't like about it one in particular is that the clearance gave details of NewCo A which would have shareholders that matched the ownership of the existing business. They actually formed NewCo B and introduced three other shareholders.

We cannot see anything that specifically states either way if the ownership changing like this is an issue. Any thoughts anybody? I don't need input on whether they can rely on the clearance as what is done is done.

The question therefore boils down to whether s162 allows a transfer of value like this whilst still allowing CGT perks that it was done for?

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By Justin Bryant
16th Feb 2016 18:36

s162

Allows a transfer to any company, so there can be other shareholders. As long as what is received is an issue of shares (or some non-share consideration too, in which case the relief is accordingly restricted) and the whole business is transferred then all should be fine and I am surprised you needed a clearance (unless perhaps they were also getting preference shares re s701 issues), as the relief is automatic.

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