Following the Autumn statement announcement, the government has immediately provided further details of the proposed changes, as well as draft legislation. The changes are to have effect for share exchanges or schemes of reconstruction carried out on or after 17 November 2022.
According to the HMRC documentation:
“Who is likely to be affected
Individuals who hold more than 5% of shares and securities in a UK close company and exchange some or all of those securities for an equivalent holding of securities in a non-UK company.
General description of the measure
The measure deems securities in a non-UK company acquired in exchange for securities in a UK company to be located in the UK for the purpose of Capital Gains Tax (CGT). Individuals will pay tax on gains or dividend and distribution income received in respect of those securities deemed to be located in the UK in the same way as they would if the securities were in a UK company.This measure will only apply where the UK company is a close company and non-UK company would be a close company if it were a UK company. In particular, it will prevent UK resident non-domiciled individuals who exchange securities in a UK company for securities in a non-UK company from accessing the remittance basis of taxation on gains realised on the disposal of those non-UK securities or distributions received in respect of those securities.”
HMRC guidance:
Draft legislation:
Related content from Claritax Books
Written for accountants and other tax advisers at an intermediate level, Capital Gains Tax is built firmly on a foundation of statutory rules and case law principles. It is illustrated throughout with practical examples, and most chapters include a summary of pitfalls and planning points.
