Section 110 Scheme
Reorganisation doesn’t have to be a burden
We understand that there often comes a point in a company journey that the advantages of diversifying could be desirable. This can often be to divide assets between shareholders. Unfortunately tax burdens often prevent businesses doing just that. We specialise in helping solvent businesses restructure their organisations via solvent liquidation, devising innovative schemes that allow relief from tax.
Key benefits include:
- Dividing key assets
- Resolving any conflicting aspirations for businesses allowing shareholders to go their separate ways
- Removing burden or risk associated with one business from another
How does it works ?
A section 110 scheme often involves the creation of a new structure involving a new parent company and two or more newly formed companies holding the assets in whatever split is needed going forwards.
The new parent company is then liquidated and the new shares of the two or more asset holding companies are distributed by the liquidator to the original shareholders.
As a result the new liquidated parent company leaves two or more companies each holding part of the assets of the original parent company.
The liquidation of the parent company will not be associated with the new companies so will have no adverse affect to company perception.
To think about:
- A section 110 scheme can be a complicated procedure and are fraught with tax issues therefore it is crucial you deal with an experienced liquidator
- A section 110 scheme only applies to a solvent company
- Section 110’s re-organisation have a number of tax issues, so it is crucial to have excellent tax planning. We can assist you every step of the way to ensure the scheme is successful from a tax authorities point of view.