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HMRC internal manual

Capital Gains Manual

Company reconstructions: shareholder: anti-avoidance provisions


TCGA92/S136 is subject to exactly the same anti-avoidance provisions as TCGA92/S135. TCGA92/S137 provides that TCGA92/S136 shall not apply unless the reconstruction or amalgamation

  • is effected for bona fide commercial reasons and
  • does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to Capital Gains Tax or Corporation Tax (this means Corporation Tax on chargeable gains).

ALL decisions on whether TCGA92/S137 (1) operates to prevent TCGA92/S136 from applying are taken in Capital Gains Technical Group. You should not express any opinion on the possible operation of Section 137 without instructions from Capital Gains Technical Group.

The statutory clearance provision in TCGA92/S138 applies to TCGA92/S136, see CG52620+. Details of clearances given or refused may be obtained from the Clearance and Counteraction Team, their contact details are at CG52631.

CG52636 explains the circumstances in which a clearance under TCGA92/S137 may be void.