CTM17270 - Distributions: demergers: action required in offices

If you receive:

  • a clearance application in connection with a demerger, under CTA10/S1091, or
  • a clearance application in respect of a potential chargeable payment following a demerger, under CTA10/S1092, or
  • a return under CTA10/S1095, and guidance has not yet been provided by the Clearance and Counteraction Team, Business, Assets and International the following procedure applies.

Clearance application for proposed demerger - CTA10/S1091

The Clearance and Counteraction Team deals with all applications for clearance under CTA10/S1091.

All clearance applications received elsewhere in HMRC should be forwarded immediately to Clearance and Counteraction Team at [email protected]

You should advise the agent or company that you have done so in the following terms:

“I refer to the application for clearance you sent me. All such applications must be made to the Clearance and Counteraction Team. Your application has been forwarded. The team may be contacted by email at [email protected] or by writing to

BAI Clearance

HMRC

BX9 1JL

The team have thirty days to reply.’’

If appropriate refer the applicant to the Annex to SP13/80 (available on the HMRC website).

It is not possible to make a demerger clearance application under CTA10/S1091 retrospectively.

If a company carries out a demerger without obtaining advance clearance, the tax implications of the transactions are dealt with on normal lines. Relief under CTA10/S1075 may or may not be due, depending on the circumstances.

Officers should refer such cases to the Clearance and Counteraction Team (This content has been withheld because of exemptions in the Freedom of Information Act 2000) for advice concerning the possible application of CTA10/S1075 with a brief summary of the transactions.

Officers might receive joint or similar applications for clearance under this or other provisions. Other provisions include:

  • TCGA92/S138 (capital reconstruction - see CG52631), TCGA92/S139 (5) (capital reconstruction involving transfer of business - see CG52810), CTA10/S748 and ITA07/S701 (transactions in securities - see CTM36880), and CTA10/S1044 (purchase of own shares - see CTM17570).
  • If there is more than one application officers should forward them all to the Clearance and Counteraction Team.

Clearance application in respect of a potential chargeable payment following a demerger CTA10/S1092

Officers should deal with a chargeable payment clearance application in the same way as for a demerger clearance but without enclosing a copy of SP13/80. Officers should immediately forward the application to the Clearance and Counteraction Team at [email protected].

Returns CTA10/S1095

HMRC Clearance and Counteraction Team maintain a list of clearances given and refused. See CTM17260. Where officers receive a return under CTA10/S1095 (exempt distribution) or CTA10/S1096 (chargeable payment) they should check with the Clearance and Counteraction Team (This content has been withheld because of exemptions in the Freedom of Information Act 2000) to ask whether clearance has been given. If clearance has not been sought or has been refused officers should send the return immediately to the Clearance and Counteraction Team together with a copy of any accompanying correspondence.