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Reconstructions may occur for a number of reasons. For example a family company in which the shareholders wish either: - to split the business into two or more parts with some family members taking one part and others taking the remainder or - one or more individuals wishing to withdraw from the business.

There are usually a number of different approaches in these cases ranging from a relatively straightforward share buyback by the company, through statutory demergers, to complicated reconstructions involving share exchanges, partitioning the share capital, distributions in specie or distributions following liquidation. There is no unified tax code that covers all the taxes that must be considered in such cases and each set of circumstances has to be analysed to find the most tax efficient way to proceed. In most cases HMRC clearances are necessary to ensure that anti avoidance legislation does not apply. 

Case Studies
Two chemical companies shared premises owned by another company they jointly owned. Each company wished to have control over their individual part of the premises. By partitioning the existing property company, we were able to transfer the various interests so that each chemical company owned their respective share of the whole, without crystallising tax on the latent capital gains.
A family company operated various trades, but also ran a property investment business. This meant the shares did not benefit from business property relief for IHT, Entrepreneurs Relief or hold over relief for CGT. By partitioning the company, the trading activities were transferred to a new company, whose shares do attract these reliefs.
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