Substantial Shareholdings Advantages And Disadvantages

Submitted By milli3300
Words: 636
Pages: 3
Open Document
Page 7: Disposal of substantial shareholdings
Where a trading company owns shares in another trading company, there is an exemption on disposal if 10% or more of the shares are held.
Exemption from corporation tax for any gain arising when a trading company disposes of the whole or any part of a substantial shareholding in another trading company.
A substantial shareholding is one where the investing company holds at least 10% of ordinary share capital and is beneficially entitled to at least 10% of the :
Profits available for distribution to equity holders
The 10% test must have been met for a continuous twelve month period during the two years preceding the disposal.
The twelve month period condition can also be satisfied by including a period during which assets which are being used in its trade by the company whose shares are being disposed of (Company A) were being used in the trade of another group company (Company B) and then transferred to Company A before the sale of the Company A shares.
This enables the exemption to apply in the situation where an existing trade carried on by one group company is transferred to a new group company before that new company is sold outside the group.
The exemption is given automatically and cannot be disclaimed. This means that as well as exempting gains, it denies relief for losses.

Example: Disposal of substantial shareholding
On 1st December 2007 SD ltd bought 20% of the shares in AM Ltd. The shareholding qualifies for the substantial shareholding exemption. During its accounting period to 31.02.2015, SD Ltd made the following disposals:
30 June 2014 it disposed of a 15% holding in AM Ltd
30 December 2014 it disposed of the remaining 5% holding in AM Ltd.
Both of these shareholdings qualify for the substantial shareholdings exemption. Clearly the first disposal is of at least a 10 holding which was held for twelve months prior to disposal. The second disposal also qualifies despite being only a 5% holding, because SD Ltd owned a 10% holding throughout a twelve month period beginning in the two years prior to this second disposal.
Rollover relief
Relief for replacement of business assets is available to companies to defer gains arising on the disposal of business assets
A gain may be rolled over by a company where the proceeds on the disposal of a
Show More

Related Documents: Substantial Shareholdings Advantages And Disadvantages

Boogers: Leadership and Maxwell Essay

If you ask 10 people to recommend five books on leadership, one of John Maxwell's books will be on every list. Of those books, most people cite "The 21 Irrefutable Laws of Leadership" as his best work. It's certainly his most well known. Concise, Maxwell dictates the 21 laws a leader must follow to get others to follow the leader. Using numerous examples drawn from a variety of people from Mother Teresa to the founders of McDonalds, Maxwell show how people have either used the laws successfully…

Words 776 - Pages 4

Essay on biol 2010

site, under Schedule Required text: How Life Works, preliminary edition, Morris et al. Meeting times and locations: Lectures: MWF, 11-11:50am in Chemistry 402 or 1-1:50pm in Gilmer 130 Semester exams: 9/21, 10/19, and 11/9, 3-5pm, Chemistry 402 or Clark 108 as assigned Final exam: **NOTE: FINAL EXAM DATE AND TIME DEPEND ON YOUR SECTION! If registered in section 1 (schedule # 11977, 11am class): Sat, Dec 15, 9am-noon, Chem 402 If registered in section 2 (schedule # 10372, 1pm class): Mon, Dec…

Words 673 - Pages 3

Essay on Days of the Year and Mfc General Information

edition, 9th edition) by Serway & Vuille (Brooks-Cole/Cengage Learning, 2011). The book is available at the University bookstore and online. We recommend that you get the UB edition (paperback) available at the campus bookstore because it omits chapters that will not be covered and is less expensive than the retail edition. Course Webpage UBLearns: https://ublearns.buffalo.edu Outcomes and Assessment PHY 102 is an algebra-based, introductory physics course, covering Electricity and Magnetism…

Words 2128 - Pages 9

Latin American Influence On The Sandinistas

remains a strong political party today (Notes). Throughout the Sandinista period public support from society was high and the group was prevalent in politics. They, however, did not succeed in one important aspect. The economy deflation and inflation was at an all-time high; it was 30,000 percent in 1988. While the latest Sandinista government is a socialist government, it is a social democratic; as opposed to a revolutionary socialist (Prevost and Vanden, Chapter 21). The dream that Augusto César Sandino…

Words 1189 - Pages 5

Improving Study Skills Assessment

told me to take. After I had taken the test I got my results and I was actually somewhat surprised what they were. My lowest score on the test was for note taking, I received a 12 out of 32 on that portion of the test. The next lowest score that I received was for time management, I received a 20 out of 32 for this section. Lastly, I received a 21 out of 32 for organizing and understanding information. There are many different things that I could do to help improve my skill levels in studying…

Words 257 - Pages 2

Essay on Standardized Test and Study Guide

expectations for the class and see how the teachers grading scale works, become familiar with chapter 1 and be ready in class with questions about chapter one, also make note of the types of questions that will be on the exam- multiple choice and true/ false. Day 2: Write down key points talked about in class. Review your notes and read chapter 2 to prepare for the next class. 2 Day 3: After class review your notes and then visit your teacher in their office hours to clear up anything that you got caught…

Words 1124 - Pages 5

Calculus: Prime Number and Concept Check Essay

The University of Western Ontario – Calculus 1000 Practice Problems for Fall 2011 Note Top students in Calculus 1000 typically do more than simply attend lectures and complete the practice problems assigned by the instructor. Self-directed study activities like carefully reading the textbook, attempting problems not assigned, attempting projects in the text, designing new problems and/or “concept” maps, and organizing math study/discussion groups can also contribute toward effective preparation…

Words 835 - Pages 4

Essay about FUNDAMENTALS OF PUBLIC SPEAKING FALL 2014 AM SYLLABUS

SCHOOL OF COMMUNICATION & MEDIA FUNDAMENTALS OF SPEECH (CMST101-01 Section 11015) – COURSE SYLLABUS If all my talents and powers were to be taken from me by some inscrutable Providence, and I had my choice of keeping but one, I would unhesitatingly ask to be allowed to keep the Power of Speaking, for through it, I would quickly recover all the rest. -Daniel Webster Professor: Perry M. Schwarz, MPA; RMC Class Location: Calcia Hall Room 108 Office Hours: By appointment with mutual consent…

Words 1687 - Pages 7

Management Accounting and d 3 s 4 mon Essay

Managerial Accounting, 3rd Canadian edition, John Wiley, Toronto, 2012. EVALUATION: | Weights | Assignments | 15% | Project | 15% | Midterm Exam | 30% | Final Examination | 40% | Total | 100% | NOTES: 1) SAKAI & EMAIL: The course outline, PowerPoint for each chapter, and other materials will be posted on SAKAI. Email correspondence may be sent to your Brock badger account. You are responsible for checking this email account on a regular basis. 2) ASSIGNMENTS: There will be…

Words 782 - Pages 4

Questions On Non-Monetary Prices

Chapter Coverage: Chapter 10: LO1 PPE – what are they? 607 – top 608 LO2 What to capitalize – IAS 16, para. 17 608 – 611 (all) LO3 Measurement of cost IGNORE Deferred payment terms except understanding why use the present value when no interest loan Lump sum purchase (BE10-6) Non-Monetary exchanges Government Grants 611 – 612 top 613 bottom – 614 614 bottom – 619 bottom 620 - 621 LO4 Specific types of PPE 621 – 624 top LO5 Cost model – see Chapter 11…

Words 437 - Pages 2