Group share exchanges: share exchanges
If a person exchanges shares in a target company for newly issued shares in another company, the share reorganisation provisions can only apply if the conditions in TCGA92/S135 (1) are satisfied. These require that
- following the share exchange the issuing company holds more than 25 per cent of the ordinary share capital of the target company, or the greater part of the voting power in the target company, or
- the share issue is the result of a general offer which initially is conditional on the issuing company securing control of the target company.The share reorganisation provisions accordingly apply both in relation to group and non-group transactions.