The recent Court of Appeal and First-Tier Tribunal decisions in the Euromoney and Wilkinson cases (respectively) provide useful guidance on the scope of the TCGA 1992 s 137 ‘main purpose test’, which prohibits ‘rollover relief’ under s 135 if a main purpose of the relevant scheme or arrangement is avoidance of liability to capital gains tax or corporation tax. Following the decisions, advisers can take comfort that a share for share exchange implemented to achieve a favourable tax outcome, as an incidental part of a broader commercial transaction without a main purpose of tax avoidance, should not generally fall foul of s 137.
If you are not a subscriber, subscribe now to read this content.
The recent Court of Appeal and First-Tier Tribunal decisions in the Euromoney and Wilkinson cases (respectively) provide useful guidance on the scope of the TCGA 1992 s 137 ‘main purpose test’, which prohibits ‘rollover relief’ under s 135 if a main purpose of the relevant scheme or arrangement is avoidance of liability to capital gains tax or corporation tax. Following the decisions, advisers can take comfort that a share for share exchange implemented to achieve a favourable tax outcome, as an incidental part of a broader commercial transaction without a main purpose of tax avoidance, should not generally fall foul of s 137.
If you are not a subscriber, subscribe now to read this content.
.tmb-editorspic.jpg?sfvrsn=df04ab27_1)
