Substantial Shareholdings Exemption

Substantial Shareholdings Exemption

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A few questions on SSE please.

1. For how long does the target company need to be trading "immediately after" sale (S19(1)(b) Sch 7AC TCGA1992)? Can it be as little as a week?

2. Company A owns company B which owns company C. A is trading, B is holding company of C. C is trading. C is being sold by B. Is B part of a "trading group" or a "trading sub-group" (Ss21 and 22 Sch7AC TCGA1992)?

3. Some of the consideration will be unascertainable deferred consideration. Will this also be exempt (assuming the SSE rules are satisfied)?

4. Does the "trade" have to be carried out in the UK (S27 Sch 7AC TCGA1992 doesn't specify as such that it does, so am assuming overseas trades are OK)?

Thanks for any assistance.

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Portia profile image
By Portia Nina Levin
24th Apr 2015 15:24

(No subject)

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Replying to Rgab1947:
Quack
By Constantly Confused
16th Apr 2015 12:24

Portia

Portia Nina Levin wrote:

The words "immediately after" mean just that. Nothing more, nothing less. It only needs to be trading fro 5 minutes; it is just that the shorter the period of time, the more questionable it is whether it is really trading. Common sense deduction.Company B is clearly a member of a trading group both before and after the disposal of C.No. The unascertainable deferred consideration is a separate asset. If the asset is not shares or an interest in shares, SSE cannot apply. Sch. 7AC, para. 1(1).No. The idea is that it is the CGT part of a participation exemption, to make the UK an attractive place to have a holding compant.

I always read your response in a quite posh internal voice, is this because you are quite posh and it is being transmitted to me via sub-ether waves, or is your avatar perhaps someone I don't realise I know who speaks in a posh voice?  I keep thinking Upstairs Downstairs...(?)

OR are the voices in my head becoming annoying again?

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Portia profile image
By Portia Nina Levin
24th Apr 2015 15:24

(No subject)

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Replying to Crouchy:
Quack
By Constantly Confused
16th Apr 2015 14:37

Arghhh!

Portia Nina Levin wrote:

Miss Jones off of Rising Damp? Were you born in a cave? Frances de la Tour is quite wll spoken, but I always make an effort to sound like the Queen* when I write, in any event.

* The way I am sure that she talks to Prince Phillip, when he needs putting in his place.

I meant Rising Damp!  Upstairs Downstairs?  Ummm, maybe because he was the tenant living above... no I can't justify my mistake...

To be fair the cave I lived in only got intermittent reception, and it was mostly cartoons.

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By User deleted
16th Apr 2015 14:58

Point 4
SSE can apply to disposal of an overseas sub. There are no geographical constraints to the exemption.

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Replying to Matrix:
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By Portia Nina Levin
24th Apr 2015 15:25

(No subject)

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By mail.taxperfect.co.uk
24th Apr 2015 09:45

Thanks all for your very helpful comments.

One final question please. Assuming all conditions are satisfied under Sch 7AC TCGA1992, then will it affect anything if the target company writes off various inter-company and directors' loans pre-sale?

Thanks.

 

 

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Portia profile image
By Portia Nina Levin
24th Apr 2015 15:25

(No subject)

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By mail.taxperfect.co.uk
24th Apr 2015 09:59

Thanks, and I mean't will the SSE still apply if the loans are written off pre-sale, and I think you're saying that it will (i.e. that it will not affect the SSE).

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