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PETER RAYNEY navigates the long and winding road of a corporate demerger case study
KEY POINTS
- The potential problems of differing businesses operated by one company.
- Subsidiary company or separate company?
- Structuring a statutory demerger transaction.
- Conditions for relief under TCGA 1992 s 139.
- Accounting for the demerger distribution.
- Does the company have sufficient distributable reserves?
Paul Macca is the 100% shareholder of Macca Hotels & Spas Ltd (MHS) and is its chief executive. On a bright summer’s day in 2012 he was waiting in the boardroom for Brian Eppie an independent tax adviser. Paul had contacted Brian a few days ago because he wanted to obtain some advice on a possible restructuring of MHS since he felt that this was ‘beyond the ken’ of his current accountants.
The boardroom door swung open. Brian was soon ushered...
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