Reflections on demergers

Demergers are great fun. Honestly they are. Every case has its own facts and circumstances and problems to be solved. People just don’t appreciate the fun we have in the tax profession. This article is a reflection on my experience with some technical meanderings and practical observations of demerger transactions which I hope are useful to an interested audience.

A brief history of the art

To begin we are focusing on the splitting of businesses or trades in a single company or group of companies.

Back in the day liquidation demergers were all the rage often referred to as a ‘section 110 demerger’. Excitement filled the office floor when a demerger project landed providing an opportunity to get involved in some complex advisory work. We don’t get out much. Then the Companies Act 2006 presented a game changer in the demerger world. A limited company...