Taxation of Company Reorganisations

Description

Taxation of Company Reorganisations, Sixth Edition is an essential reference source for tax advisers which covers the basic rules of corporation tax and capital gains, reorganisations, share exchanges and other deemed reorganisations, reconstructions, mergers, demergers and branch incorporations, as well as cross-border transactions. Written by authors with more than fifty years’ experience of dealing with clients from small owner-managed businesses to multinational corporate groups, this title includes guidance on the full range of corporate transactions and is applicable to a wide number of organisations. While there is comprehensive coverage of the technical and theoretical meaning of the legislation, the authors have also drawn on their vast practical experience, derived from many years of transaction-based work. This Sixth Edition has been brought fully up to date with recent Finance Acts including FA 2019 and the proposals for FA 2020 that were published in July 2019. It has been reviewed for company and European law and has been updated in relation to the following: Cases updated since the last edition include: Preface Authors Contents Table of statutes Table of statutory instruments Table of cases Part 1. Fundamentals of corporation tax Chapter 1: Corporation tax and chargeable gains Introduction Corporation tax Taxation of capital gains Conclusion Basic rules of corporation tax Taxation of capital gains Group relationship rules The degrouping charge Substantial shareholding exemption Taxation of intangible fixed assets Taxation of loan relationships Taxation of derivative contracts Tax avoidance and anti-avoidance Conclusion Chapter 2: Stamp taxes A brief history Stamp duty and SDRT Consideration Reliefs SDLT Anti-avoidance LBTT Anti-avoidance LTT Anti-avoidance Chapter 3: Value added tax The VAT system in outline VAT and company reorganisations Chapter 4: EU legislation Scope of this chapter Introduction to EU legislation Mergers of public limited liability companies Divisions of public limited liability companies The Mergers Directive Cross-border mergers The Sevic case The European Company Statute Societas Europaea What does the future hold? Conclusion Part 2. Reorganisations Chapter 5: Introduction to reorganisations Introduction Meaning of 'reorganisation' – the plain English approach Early tax legislation The meaning of 'reorganisation' – case law Purpose of the legislation Achieving Parliament's intention Conclusion Chapter 6: Reorganisations of share capital Introduction The legislation Examples Capital reductions and their interaction with distributions Conclusion Stamp taxes and reorganisations Value added tax Chapter 7: Conversions of securities Introduction Definition of 'security' The legislation Conclusion Stamp taxes Value added tax Part 3. Deemed reorganisations Chapter 8: Share-for-share exchanges Introduction to Part 3 Purpose of the legislation Introduction The legislation Examples Interaction with capital gains degrouping charge Conclusion Stamp taxes Value added tax Chapter 9: Exchanges involving qualifying corporate bonds Introduction What is a QCB? How to make a non-QCB The legislation Examples Conclusion Stamp taxes Value added tax Chapter 10: Earn-outs Introduction The legislation Examples Conclusion Stamp taxes Value added tax Chapter 11: Interaction with substantial shareholding exemption Introduction Share-for-share exchanges – internal reorganisations Share-for-share exchanges – disposals Reorganisations involving QCBs Simple reorganisations Conclusion Flow chart Chapter 12: Interactions with other legislation Reliefs designed to encourage investment Conclusion Chapter 13: Reorganisations: Anti-avoidance and clearances Introduction The legislation Conclusion Chapter 14: Clearances Introduction The legislation Practical issues Other tax regimes Conclusion Stamp taxes Value added tax Part 4. Reconstructions Chapter 15: Introduction to reconstructions Introduction Meaning of ‘reconstruction’ – the plain English approach Company law decisions Early tax legislation What is a reconstruction? Non-statutory tax practices Modern tax legislation Conclusion Stamp taxes and VAT Chapter 16: Definition of ‘reconstruction’ Introduction Overview of the definition The definition – TCGA 1992, Sch 5AA Conclusion Chapter 17: Company compromises or arrangements Introduction CA 2006, ss 895 and 899 – application and court sanction for
compromise or arrangement CA 2006, s 900 – powers of court to facilitate reconstruction
or amalgamation Conclusion Value added tax Stamp taxes Chapter 18: The UK reconstruction reliefs Introduction TCGA 1992, s 136 – shareholder and creditor
reconstruction relief TCGA 1992, s 136 – scheme of reconstruction involving
issue of securities TCGA 1992, s 139 – company reconstruction relief TCGA 1992, s 139 – reconstruction involving transfer
of business Reconstructions and intangible fixed assets – CTA 2009, Part 8 Interaction of CTA 2009, Part 8 with chargeable gains provisions Conclusion Stamp taxes Value added tax Part 5. Mergers Chapter 19: UK company mergers Scope of this chapter Legal considerations Merger structures Commercial transactions Tax analysis Is it a reconstruction? Reliefs for transferor companies Is it a distribution? Capital gains reliefs for non-corporate shareholders Capital gains reliefs for corporate shareholders Upstream mergers: a special case Further issues relating to mergers Conclusion Stamp taxes Value added tax Chapter 20: Cross-border mergers Introduction Definitions of a merger Legal background FA 2007, s 110 Mergers Directive regulations The UK regulations The legislation TCGA 1992, s 140E: mergers leaving assets within UK tax charge Further reliefs for mergers that leave assets within the UK tax charge Intangible fixed assets – European cross-border merger: transfer of UK business Loan relationships: European cross-border merger Derivative contracts: European cross-border merger Mergers leaving assets outside the UK tax charge Further reliefs for mergers that leave assets outside the UK tax charge Treatment of securities issued on merger – shareholder relief Distributions Other consequential provisions Conclusion Stamp taxes Value added tax Part 6. Demergers Chapter 21: Introduction to demergers Introduction What is a demerger? Why demerge? Conclusion Chapter 22: Demergers: legal background The legal basis for a demerger Dissolution without winding up Interaction with EU legislation Demerger structures Direct demergers Stamp taxes and direct demergers Indirect demergers Stamp taxes and indirect demergers Chapter 23: Liquidation distributions Introduction and commercial purpose Legal background Tax analysis Commercial issues on liquidation demergers Conclusion Liquidation demergers and stamp taxes Value added tax Chapter 24: Exempt distributions Historical introduction and commercial purpose Legal background Overview of the code Structure of the code Examples and analyses Conclusion Stamp taxes and distribution demergers Value added tax Chapter 25: 'Return of capital' demergers Introduction and commercial purpose Legal background Tax analysis Conclusion Stamp duty Stamp duty land tax Value added tax Chapter 26: EU cross-border demergers Introduction Legislative background EU cross-border demerger transactions Specific legislation for the Mergers Directive Further reliefs for cross-border demergers Interaction with overseas equivalents to Mergers Directive provisions UK equivalents to Mergers Directive divisions Conclusion – legislation arising from the EU Mergers Directive Stamp taxes Value added tax Part 7. Branch incorporations Chapter 27: Incorporation of non-UK branches Introduction Foreign permanent establishment exemption The legislation Conclusion Stamp taxes Value added tax Chapter 28: EU branch incorporations Introduction Transfers of assets The legislation Further reliefs for cross-border demergers Conclusion – branch incorporations Stamp taxes Value added tax Index