Part 23

Company distributions
Chapter 5

Demergers

Exemption by virtue of section 1076 or 1077: conditions

Conditions for distributions within section 1076(a)
1082
1
Condition E is that the shares mentioned in section 1076(a)—
a
must not be redeemable,
b
must constitute the whole or substantially the whole of the distributing company's holding of the ordinary share capital of the subsidiary, and
c
must confer the whole or substantially the whole of the distributing company's voting rights in the subsidiary.
2
Condition F is that the distributing company must after the distribution be either—
a
a trading company, or
b
the holding company of a trading group.
But see subsections (3) and (4).
3
Condition F need not be met if the distributing company is a 75% subsidiary of another company.
4
Condition F need not be met if—
a
the transfer mentioned in section 1076(a) relates to two or more 75% subsidiaries of the distributing company, and
b
the distributing company is dissolved without there having been after the distribution any net assets of the company available for distribution on a winding up or otherwise.
Pt. 23 applied (with modifications) by 2003 c. 1, s. 554AC(3) (as inserted (with effect in accordance with Sch. 1 para. 14 of the amending Act) by Finance Act 2018 (c. 3), Sch. 1 para. 2)