Capital Gains Relief

The substantial shareholding exemption (SSE) was introduced in 2002 as part of a package of reforms introduced to make Britain a tax-favourable place for multinational corporations. If a disposal is within the SSE conditions any gain accruing to the disposing company (the 'investing company') on a disposal of shares forming part of a substantial shareholding in the 'company invested in' is not chargeable to UK corporation tax. However the conditions that must be met in order for the SSE to be available are complex and there are many traps for the unwary tax adviser. This article considers the application of the main SSE exemption in the context of...