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The early bird

07 September 2006 / Brian Williams
Issue: 4074 / Categories: Comment & Analysis , Companies
BRIAN WILLIAMS provides a case study explaining some of the intricacies of demergers and why it is imperative to take tax advice early.

DO YOU REMEMBER the 1997 film Sliding Doors with Gwyneth Paltrow? There were two story lines running together: she catches the train in one of them and misses it in the other the difference being the few seconds it takes for the sliding doors to close. Well this is the tax version.

It is based on two actual cases with names and details changed to preserve anonymity and to fit the story. In one case Caught-It Ltd the client engages in sensible long-term planning and is able to take advantage of valuable tax reliefs. In the other Missed-It Ltd the client does not engage in tax planning until a deal is almost concluded and is not able to take advantage of the very same valuable tax reliefs.

Planning ahead

Caught-It is a small group comprising a holding company and two trading subsidiaries both...

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