Following recent legislative changes and a number of new cases, the tax implications of reorganisation are becoming increasingly intricate and complex.
There are many reasons why an organisation might undergo a reorganisation. Corporate simplification or rationalisation; preparation for the sale of whole or part of a group; post- acquisition transfer 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 consequences into account.
A reorganisation may trigger tax liability such as Stamp Duty Land Tax, capital gains or impact the availability of tax relief. The practical application of QCBs and non-QCBs raises significant technical complexities, and solvency and cash reserves will come under scrutiny. VAT will require consideration, as well as the taxable status of the assets, VAT group arrangements, and the possibility of going concern treatment. Employee pensions schemes may also be affected.
It is clear that careful tax planning is critical to navigating the technical complexity of business reorganisation.
Here to help
As experienced tax advisers, ETC offers specialist advice and guidance across all types of reorganisation – including deemed reorganisation, reconstruction, merger, (liquidation) demerger and branch incorporation.
We work both directly with businesses of all sizes and with professional advisers such as lawyers and accountants to support their clients in providing a complete tax planning service relating to asset transfer.
We are experienced in dealing with businesses with entities outside the UK and the additional issues and opportunities this might present.
Operating as part of the reorganisation project team, we provide highly specialist tax advice at every stage, from initial planning and due diligence through to approved transfer and strike off/liquidation.
Our experience extends to all size of transaction or company, from the reduction of capital rules and using them for tax structuring, to EU cross-border transactions.
Our expertise also involves advice on the practical application of QCBs and non-QCBs, and the wider context of anti-avoidance provisions such as the Disclosure of Tax Avoidance Scheme (“DOTAS”) rules and the General Anti-Abuse Rule (“GAAR”) regime. We can also advise where clearance may be required from HMRC if there is uncertainty surrounding the tax treatment of a capital contribution.