Taxation of public to private transactions

A public to private (P2P) or take private transaction is very generally the sale of the shares of a public entity (target) which is listed on a regulated market (such as the main market of the London Stock Exchange) or a multilateral trading facility (such as the alternative investment market (AIM)) to a private entity (offeror). On P2P transactions there are numerous regulatory concerns (in the UK P2P transactions are regulated by CA 2006 and the City Code on Takeovers and Mergers (the Takeover Code)) but also tax considerations for the shareholders of the target and the offeror.

There are many reasons why a public quoted company may want to become a private company such as reduced regulatory and reporting requirements and less onerous obligations under the CA 2006 as well as the opportunity for shareholders (including managers) to make financial gain on the disposal of...