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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Company reconstructions: shareholder: unitisation schemes

A unitisation scheme is a particular type of reconstruction or amalgamation. In a unitisation the shares and securities held by a private investment company are transferred to an authorised unit trust. The unit trust then issues units to the shareholders in proportion to their shareholdings. A transfer may be made to a number of different unit trusts under the same management. TCGA92/S136 applies to the issue of the units.

TCGA92/S139 does not apply to the transfer of the shares and securities to the unit trust because of TCGA92/S139 (4), see CG52819.

Most major unit trust managers offer this type of scheme. Typically the original company will be an old family trading company whose business has been sold and the proceeds invested. Over the years the shareholdings have been diluted as the shares pass down through the generations. The present members do not want to manage the investment portfolio themselves. Therefore, they are happy to transfer the shares to the unit trust.