Government targets share exchanges involving non-UK incorporated close companies

As part of HMRC’s focus on anti-avoidance the chancellor announced that the spring Finance Bill will include legislation to the effect that shares and securities in a non-UK company acquired in exchange for securities in a UK close company will be deemed to be located in the UK.

Individuals will pay tax on gains or dividend and distribution income received in respect of those securities deemed to be located in the UK in the same way as they would if the securities were in a UK company.

This measure which has effect from 17 November 2022 applies only where the UK company is a close company and non-UK company would be a close company if it were a UK company. In particular it will prevent UK resident non-domiciled individuals who exchange securities in a UK company for securities in a non-UK company from accessing...