Mark McLaughlin highlights a situation where an important tax relief for companies may be inadvertently lost.
The substantial shareholdings exemption (SSE) is a valuable relief for companies. The SSE rules broadly provide that a gain on a disposal by a company of shares in another company (or an interest in shares, or certain assets related to shares) is generally not a chargeable gain, provided two conditions are met:
- The company making the disposal (the ‘investing company’) held a substantial shareholding in the company whose shares are being disposed of (the ‘investee company’).
Certain requirements are met in relation to the investee company, which largely involve the company being a trading company, or the holding company of a trading group or a trading subgroup for a specified 12-month period prior to the disposal (and in some cases