CG52631 - Share Exchange: Anti-avoidance: Clearance Procedure

Cookies on GOV.UK

We use some essential cookies to make this website work.

We’d like to set additional cookies to understand how you use GOV.UK, remember your settings and improve government services.

We also use cookies set by other sites to help us deliver content from their services.

Accept additional cookies Reject additional cookies View cookies Hide cookie message Skip to main content

1. Home

1. Back to contents
2. CG50200C
3. CG52521P

CG52631 - Share exchange: anti-avoidance: clearance procedure

There is an advance clearance procedure. It is not mandatory for companies to apply for clearance. The procedure exists so commercial decisions are not hindered by uncertainty about the possible application of the anti-avoidance provisions. For practical reasons only the company whose shares or debentures are being acquired or the company making the acquisition can apply for clearance. TCGA92/S138 allows either of these companies to apply to the Board for confirmation that the anti-avoidance provisions of TCGA92/S137 will not prevent TCGA92/S135 from applying. For the clearance to be valid the application must be made and granted before the new shares or debentures are issued.

The information provided in support of the application must fully and accurately disclose all the relevant facts. If it does not the clearance may be void.

The Board has thirty days to deal with the application. If clearance is refused the applicant can ask for the application to be reconsidered by the First-tier Tribunal. All referrals to the Tribunal are dealt with by the Clearance and Counteraction Team, BAI.

The clearance procedure is only concerned with whether the anti-avoidance provisions of TCGA92/S137 will prevent TCGA92/S135 or TCGA92/S136 from applying. Clearance does not mean that the sections will actually apply. In the case of Section 135 it is still necessary to check whether the technical conditions set out in CG52523 are satisfied. CG52660+ gives instructions on how to deal with computations prepared on the basis that Section 135 will apply.

The clearance letter will not indicate whether any debentures that are to be issued are qualifying corporate bonds (QCBs). If the debentures are QCBs it is still relevant to apply for clearance, see CG53823. But TCGA92/S135 and TCGA92/S136 will not apply to the exchange or reconstruction. For full guidance see CG53845+.

The clearance only deals with the share exchange or, in the case of TCGA92/S136 the scheme of reconstruction. All other Capital Gains Tax and Corporation Tax aspects of the transaction must be dealt with in the normal way. The transactions may include Capital Gains Tax or Corporation Tax events and avoidance that are not referred to in the clearance letter or the clearance application.

Previous page Next page Print this page

Is this page useful?

• Yes this page is useful
• No this page is not useful

Thank you for your feedback Report a problem with this page

Help us improve GOV.UK

Don’t include personal or financial information like your National Insurance number or credit card details.

This field is for robots only. Please leave blank What were you doing? What went wrong? Send Cancel

Help us improve GOV.UK

To help us improve GOV.UK, we’d like to know more about your visit today. Please fill in this survey (opens in a new tab).

Cancel