Company partitions in practice

Article Abstract:

Businesses are sometimes partitioned, divided into two or more parts which are carried out as separate businesses. Shareholders either take shares in the new companies to reflect their holdings, or divide into separate groups for each of the new companies. Two procedures are voluntary liquidations, considered a reconstruction by the UK Inland Revenue, in which the parts of the business are sold to the two new firms, and demergers, which can allow the retention of the old firm and is more tax efficient. However, demergers are not available to all firms: they are not available to investment businesses or in situations where one of the companies is to be sold, and thus liquidations are more common. Liquidations require an allocation of the net assets to shareholders that is proportionate to their shareholding, which requires that holdings be valued as a percentage of the total share capital.

Analysis, Liquidation, Great Britain, Partition, Partition (Property)

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Embracing pay and file

Article Abstract:

The implementation of the new pay and file system of settling corporate tax and submitting returns and accounts on Sep 30, 1993 will mean more administrative processes for both tax advisers and their client companies. These additional internal procedures will entail accountants to complete increasingly complicated audits and computations for accountants. Procedural changes will require careful calculation and recording to avoid penalties and interests. Revised provisions on estimated returns, interests, group reliefs and loans to participators should be properly noted and studied to avoid transitional problems. Accountants will also be required to develop more open communication lines with clients to ensure that necessary information are correctly and easily gathered and deadlines met.

Tax return preparation services, Management, Services, Tax consultants, Tax reform, Accountants

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Corporation tax and groups

Article Abstract:

Advice on dealing with UK taxation examination questions involving acquisitions, disposals and reorganisations within groups of companies is presented for students working at an advanced level.

United Kingdom, Tests, problems and exercises

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