Apportionments on demerger
Posted: June 1st, 2022, 12:49 pm
It is my understanding that when a Company splits into two, a demerger in other words, the UK tax consequence is that the original purchase price is apportioned between the two. That's provided the event is NOT treated as a dividend distribution, so it's only the eventual CGT liability that's relevant.
It's also my understanding that there's a factor agreed with HMRC for the apportionment .
Although important to private investors, such factors can be elusive to find, either by Google search or from corporate websites.
A case in point is Investec.
This spun off Nonety One plc in 2020 and has just completed a further distribution of Ninety One shares The first distribution was not treated as a dividend as witnessed by its non-appearance in the Broker's tax statement for the 2019-20 yaer. Perhaps they haven't established the treatment of the second one, but in any event, can the factor(s) be found anywhere?
It's also my understanding that there's a factor agreed with HMRC for the apportionment .
Although important to private investors, such factors can be elusive to find, either by Google search or from corporate websites.
A case in point is Investec.
This spun off Nonety One plc in 2020 and has just completed a further distribution of Ninety One shares The first distribution was not treated as a dividend as witnessed by its non-appearance in the Broker's tax statement for the 2019-20 yaer. Perhaps they haven't established the treatment of the second one, but in any event, can the factor(s) be found anywhere?