Can several companies with overlapping owners be brought into one group?
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Yes. Where the same people own companies in different proportions, a new or existing company can be made the parent by share-for-share exchanges. The shareholdings usually need to be lined up first. Where the conditions are met, the exchanges are not disposals for capital gains tax. HMRC clearance is normally applied for before any shares are issued.
Why equalise the shareholdings before a share exchange?
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If the owners hold different proportions in each company, the exchange can change who owns what. That can affect the capital gains position and stamp duty relief, which needs the same proportions before and after. Lining up the shareholdings, and the share classes, first keeps the exchange simple and the clearance application clear.
What does group relief let a group do?
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Group relief lets one company in a group use its trading losses against the profits of another, so the group pays less corporation tax overall. The companies must be in the same group, which needs 75% common ownership. Other conditions apply, and the claim must be made within the time limit. The rules apply to profits and losses of the same period.
How are assets moved between group companies for capital gains tax?
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Within a capital gains group, assets can generally move between companies on a no gain, no loss basis. That means no tax arises at the time of the transfer. There is a catch. If the company leaves the group within six years while still holding the asset, a degrouping charge can arise. Sale plans should be checked first.
Is stamp duty land tax payable when property moves within a group?
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Group relief from stamp duty land tax is available for transfers between companies in a 75% group, if its conditions are met. It can be withdrawn, with tax payable, if the buying company leaves the group within three years while still holding the property. So relief should be checked against any plan to sell.
Why separate property from the trading companies in a group?
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Holding property in a separate company keeps it away from the risks of trading. If a trading company has a problem, the property is not directly exposed. It can also make a later sale simpler, because a buyer may want the trading company without the property. The rent charged and the tax position of each company need to be set up carefully.
Why might some companies be left outside the group?
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Not every company belongs in a group. Reasons can include different owners, the tax position of the company, or a wish to keep a business separate. Leaving a company outside means it does not share group reliefs. It also affects the corporation tax limits, because companies under common control can be associated with each other.
Can a company be sold to an employee ownership trust?
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Yes, if the conditions are met. For sales to an employee ownership trust on or after 26 November 2025, 50% of the gain is chargeable at the time of sale and the rest is relieved and held over. Earlier sales could be free of capital gains tax. The date and the conditions matter, so planning should start early.
Do EMI options qualify for Business Asset Disposal Relief?
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They can. Gains on shares acquired by exercising Enterprise Management Incentive options can qualify for the Business Asset Disposal Relief rate if the option was granted at least two years before the sale, and the other conditions are met. The relief is limited to a lifetime amount, and the rate has been changing, so the current figures should be checked.
How long does a group reorganisation take?
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It depends on the number of companies, the shareholders and the clearances. HMRC must normally reply to a statutory clearance application within 30 days of a complete application. In this case, the work took six weeks from planning to completion, including clearance, which HMRC granted within three days. A group with outside shareholders or different share classes usually needs more preparation.
