CG52724 | Company reconstructions: shareholder: distributions

There is no need for the company to be liquidated for TCGA92/S136 and TCGA92/S139 to apply. In the example in CG52723 after the share reorganisation Buccaneer Holidays Ltd could have declared a dividend on the A shares which it paid by transferring the UK business to Swan Ltd. Swan Ltd would then issue ordinary shares to Mr Williams. The A shares are now worthless and may be cancelled. A company other than the original company has issued ordinary shares to the person holding the class of share in the original company that was involved in the scheme of reconstruction. Thus the first condition of Sch 5AA is met. Taking the activities of the successor companies (Swan Ltd and Buccaneer Holidays Ltd) as a whole, the whole of the business of the original company (Buccaneer Holidays Ltd) is carried on by the successor companies. Therefore the third condition of Sch 5AA is met. As indicated at CG 52720, assume the second condition of Sch 5AA is met. This is therefore a scheme of reconstruction.

TCGA92/S136 will apply to Mr Williams’s shareholdings and TCGA92/S139 to the company. Mr Dampier now owns all the shares in Buccaneer Holidays Ltd which has only the overseas business.