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This guidance note summarises some of the ways in which companies may reorganise their activities and some of the key tax considerations.

A company may want to reorganise its activities or its share structure for a number of different reasons. The most common are to prepare for a sale (as often a buyer will want a new ‘clean’ company to hold the trade) or to return capital to investors. However, it may also be to merge difference business together or to split an existing business into two or more parts.

Without specific reliefs these sorts of reorganisations would create capital gains charges, either at the shareholder or corporate level (or both). A number of reliefs are available which can, either singly in or in combination, allow such reorganisation to take place without a tax charge.

In addition to the reorganisations discussed below, a company may also undergo a demerger process. In simple terms, a demerger involves the separation of a company’s business into two or more parts, typically carried on by successor companies under the same