CTM17300 | Distributions: demergers: reference to Clearance Team
From HM Revenue & Customs · Company Taxation Manual
Demergers are a complex area and officers should not take action in connection with any return, information or assessment relating to demergers without guidance from the Clearance and Counteraction Team, Counter-Avoidance or Chargeable Gains Technical Group.
Clearance given under
HMRC Clearance and Counteraction Team publishes for officers details of clearances given under , see , and will provide additional information including a copy of the application and any supporting documents on request.
Officers should not routinely open an enquiry into a Corporation Tax return simply to check that the demerger took place precisely as proposed, but should use the opportunity if an enquiry is opened for other reasons. If it seems the demerger did not take place precisely as proposed contact the Clearance and Counteraction Team as above. In particular, if it appears that there was any intention at the time of the demerger
to cease or sell off a trade (whether demerged or retained by the distributing company), or
to change control of a company,
contact the Clearance and Counteraction Team. The return from the distributing company required under should be obtained.
Officers should also seek to identify any chargeable payments made within five years of the demerger, see below and . Report any chargeable payments for which clearance under has not been given to the Clearance and Counteraction Team.
Clearance refused under
Where HMRC has refused clearance under the Clearance and Counteraction Team will advise and may ask for a report.
Clearance under
Where HMRC has given clearance under in respect of a potential chargeable payment, the Clearance and Counteraction Team may ask a case officer to pursue the return required from the person making the chargeable payment under .
Where a chargeable payment is made, the case officer dealing with the company or other person making the payment should
check that the payer, if a company, has deducted and accounted for tax under ,
check that a non-company payer has deducted and accounted for tax under ,
pursue the necessary return of amounts and recipients,
inform Customer Compliance Group (Ocelot) so that officers can consider liability under , and
reinstate any charge under or , which had previously been lifted by the demerger legislation.