CTM17310 | Distributions: demergers: liquidation reconstruction
From HM Revenue & Customs · Company Taxation Manual
It is possible for a company to carry out a demerger without incurring a distributions liability. It can do so by taking advantage of . This excludes from the scope of any distribution made in respect of share capital in a winding up.
For example, the company may:
form two or more subsidiaries,
transfer a trade to each subsidiary in exchange for shares,
put the original company into liquidation, and
in the course of the liquidation distribute the shares in the new subsidiaries to the original shareholders.
removes the distribution from the scope of the CT distributions legislation, so cannot apply.