CGT and dividend tax relief
From 1 July 2002, tax relief may be available where a business restructures by demerging one or more subsidiaries, provided the demerger is undertaken for commercial reasons.
For shareholders or unit-holders of a group that demerges:
- CGT and dividend tax relief may be available for the demerger,
- they will need to adjust the cost base of their remaining interests and new interests.
For members of the demerger group:
- certain capital gains and capital losses are ignored
- reduced cost base and capital loss adjustments may be required.