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There are many reasons why you might consider a reorganisation – corporate simplification or efficiency for example; preparation for the sale of whole or part of your company or business or one of the companies within a group; or post- acquisition – for example the transfer of an asset or the whole of a business to meet the needs of the new ownership.
Whatever the commercial objective, the tax treatment of any transfer of business or assets should be considered from the early stages of the process, taking short, medium and long term tax consequences of that reorganisation into account.
A reorganisation can lead to a significant number of potential tax liabilities, from stamp duty land tax where property is involved, to capital gains tax, to VAT, to tax on intangible assets. A reorganisation can also impact a business’ opportunity to use tax reliefs or losses.
Careful planning is needed to ensure that the tax position does not overtly negatively impact on the transaction as a whole, such that the reorganisation is no longer financially viable.
Enterprise Tax can help with all forms of reorganisation whether by way of share for share exchange, reconstruction, liquidation demerger, reductions in share capital or incorporation.
We can also advise you where we believe clearance may be required from HMRC – for example in relation to a share-for-share or loan note transfer, a scheme of reconstruction or where large dividends or other distributions form part of the reorganisation. In those instances, we will write to HMRC to obtain the appropriate clearances.
We are also experienced in dealing with businesses who have operations outside of the UK, and advising on the additional tax issues and opportunities this might present. International group reorganisations require consideration of the tax and legal regimes in each jurisdiction. Careful advance planning is, therefore, even more important to avoid unnecessary tax costs.