An individual holds 100% of the shares in parent company (A), which in turn holds 100% of the shares in subsidiary company (B). Due to future plans for B we would like to break up the group such that the individual holds 100% of the shares in both A and B directly. B has a value of circa £500k and is a trading company. A holds property and receives rental income.
Is there a simple way to acheive this? It is essentially a reverse of a share for share exchange.
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Your question is tagged as tax, but tax is not mentioned in your question.
The simple mechanics of achieving what you want is for A, reserves permitting, to pay a dividend in specie (of its shareholding in B) to its shareholder.
With the change to the SSE rules, it should be able to claim it. However, it is the tax position of the shareholder that is of concern. To demerge in the simple manner proposed would trigger a hideous income tax charge. What is required is what I might term a proper demerger. A statutory demerger is not possible but a liquidation demerger or, probably easier, a capital reduction demerger should be possible. Both require some care to implement correctly.
Yes; a capital reduction demerger (first inserting a new holdco) is usually the way to go to avoid these income tax issues and yes; you should engage a tax specialist to do that.