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HMRC internal manual

Capital Gains Manual

Share exchange: anti-avoidance: clearance procedure

There is an advance clearance procedure. It is not mandatory for companies to apply for clearance. The procedure exists so commercial decisions are not hindered by uncertainty about the possible application of the anti-avoidance provisions. For practical reasons only the company whose shares or debentures are being acquired or the company making the acquisition can apply for clearance. TCGA92/S138 allows either of these companies to apply to the Board for confirmation that the anti-avoidance provisions of TCGA92/S137 will not prevent TCGA92/S135 from applying. For the clearance to be valid the application must be made and dealt with before the new shares or debentures are issued.

The information provided in support of the application must fully and accurately disclose all the relevant facts. If it does not the clearance may be void.

The Board has thirty days to deal with the application. If clearance is refused the applicant can ask for the application to be reconsidered by the First-tier Tribunal. All referrals to the Tribunal are dealt with by the Clearance & Counteraction Team, Anti-Avoidance Group.

Clearance application in Local office

Clearance & Counteraction Team, Anti-Avoidance Group deals with all applications for clearance.

If you receive a statutory clearance application that should have been sent to the Clearance & Counteraction team then send the application to the team.  Their contact details can be found at:

Advise the agent or company that you have done so in the following terms:

“I refer to the application for clearance you sent me. Please note that all such applications must be made to the Clearance & Counteraction Team. I have sent the application to them. The 30 day time limit within which the Board is expected to reply will begin when the application is received by them.”  Provide details of the page above.

At the same time you may receive an application for clearance under another section. If so you should deal with it in accordance with the relevant instructions listed below. If more than one application is made in the same letter you should ask the applicant to make separate applications.

ICTA88/S215 - demergers, see CTM17260 onwards.

ICTA88/S225 - company purchase of own shares, see CTM17570.

ICTA88/S707 - transactions in securities, see CTM36880.