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Three-way split; Sibling transaction; Place in the sun; Residential conversion
Three-way split
The tax-efficient restructuring and equalisation of company shareholdings.
A trading company is owned by three individuals in the proportions of: 40% 40% and 20%.
One of the 40% shareholders wishes to exit the company. Because the conditions for a company buyback of own shares are not met (he has owned them for less than five years) the plan is for the remaining two shareholders to set up a new company which will buy out the exiting shareholder for cash.
The new company will offer the continuing shareholders a further issue of its own shares such that the trading company will become a wholly-owned subsidiary of the otherwise dormant new holding company.
Clearance is to be sought under TCGA 1992 s 138 in relation to the two remaining shareholders that the provisions of TCGA 1992 s 135 will apply to the exchange...
