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M Group Holdings case confirms HMRC view of application of Substantial Shareholding Exemption

A recent First Tier Tribunal judgement has confirmed HMRC’s view – see here for full judgement   http://www2.bailii.org/uk/cases/UKFTT/TC/2021/TC08054.html  of the required holding period for Substantial Shareholding Exemption to apply where a trade has been ‘hived down’ into a new company.

The case concerns the specific application of part of the Capital Gains Tax legislation (Para 15A Schedule 7AC Taxation of Chargeable Gains Act 1992) which has potential significance where a trade was ‘hived down’ ahead of a sale. Tax Partner Tom Saltmer comments “The application of this clause had been in doubt for some time as it potentially created an unnatural situation where Substantial Shareholding Exemption would apply if the original company had a dormant subsidiary but would not apply if there was no such subsidiary”.

Whilst the Judge in the M Group Holdings case did note this unnatural outcome it was not found that this was sufficient to depart from the strict wording on the legislation.

On that basis it is clear that HMRC’s view is that Substantial Shareholding Exemption would not apply where a single company ‘hives down’ a trade ahead of a sale – likely meaning a substantially worse tax position. Potential transactions will then need to be structured on a different basis to achieve the same tax outcome.

If you have any questions please contact ts@burgesshodgson.co.uk

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Another success story – Burgess Hodgson assist in substantial investment deal

Last updated on June 1st, 2018 at 03:47 pm

Engenie, a London-based company specialising in electric vehicle (EV) rapid charging, has received a substantial capital investment from Investec, which will allow the business to reach its network target of 1,500 rapid chargers across the UK.

Engenie’s innovative and market-leading technology can charge a car in less than 30 minutes, which will fall to 10 minutes with the introduction of ultra-rapid chargers. Current rapid chargers are up to 16 times faster than standard points, helping to make EVs more practical for UK drivers.


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Last updated on June 1st, 2018 at 03:52 pm

Sparshatts of Kent Group, an award-winning Mercedes-Benz commercial vehicle dealer, has announced its sale to Belfry Trucks Limited. Having seen significant growth, it now employs over 200 people across four sites and has a turnover of over £88.3 million.


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Think Furniture

Last updated on September 30th, 2016 at 12:21 pm

“Thorough, communicative and knowledgeable.” These are the three words that Tony King, managing director of Think Furniture Design Limited, uses to describe Burgess Hodgson. (more…)

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Last updated on September 27th, 2016 at 09:27 am

One of the marks of a good accountant is client retention. Mike Boorman, managing director of West One UK Ltd is a perfect example: he’s been a client of Burgess Hodgson for more than 20 years, the last four of which have been with his current business – and he’s not in any hurry to move! (more…)

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Last updated on January 18th, 2021 at 11:27 am

“Burgess Hodgson have been magnificent.” So says John Bird, former owner of long-standing Kent firm the Abird Group for whom Burgess Hodgson acted in the sale of his (and his family’s) shareholding in the business to HSS, a leading national supplier of tools. (more…)

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Leydon Lettings celebrates milestone

Last updated on September 28th, 2016 at 05:29 pm

While 2012 might be a ‘jubilee’ year for the reigning monarch, Leydon Lettings (www.leydonlettings.co.uk) is celebrating its own jubilee having racked up 25 years of letting student accommodation in Canterbury.

The business – which began life in 1987 – is dedicated to renting student houses and has developed a strong reputation for modern thinking and high standards during quarter of a century of trading. (more…)

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Last updated on September 28th, 2016 at 05:28 pm

With its experience in working with charities, Burgess Hodgson was an ideal choice to handle the charity’s interests, as project manager Kathryn Rodgers explains: “We were looking to get a competitive price from a local provider who could provide our accountancy services, but also find an accountant who truly understood the needs ofa local charity and the regulatory requirements that entails. (more…)

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ABDO sets sights on global expansion

Last updated on January 18th, 2021 at 12:00 pm

Since then, ABDO has grown rapidly and the Association currently represents over 5,300 qualified dispensing opticians in the United Kingdom (around 95 per cent), in addition it has over 1,700 student and 600 Associate members as well as around 700 members overseas. (more…)

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BH helps steer Gardner Marine Diesels to success

Last updated on January 18th, 2021 at 12:00 pm

In less than a year Michael Harrison, the entrepreneurial managing director of Gardner Marine Diesels, the Canterbury-based business that builds and service Gardner engines in marine applications, attended to vessels in eight different countries on four continents. To say that business is thriving for Gardner Marine Diesels would be an understatement. (more…)

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