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bigduckontax, Accountant
Category: Tax
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I need to consider restructuring mu business. There are

Customer Question

I need to consider restructuring mu business.

There are two discreet trading activities – one is early stage. I am considering raising equity finance for this latter trading activity but would like to ensure that I can do so tax efficiently (particularly in the event of a later sale).

I need advice on whether to hive down this activity into a newco subsidiary or separate into a separate company under parallel ownership (so as to take advantage of Entrepeneurs Relief). In the case of the latter course of action, I need advice on whether to undertake a Statutory Demerger or use a simpler process.

Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.

Hello, I'm Keith and happy to help you with your question. It seems to me that a Statutory Demerger is quite a palaver and I wonder if it is worth the effort involved.


I lean towards starting an entirely new company for the additional trading just started. It will make life much simpler and you will get Entrepreneur's Relief to boot. The minimal activity so far can be passed through your existing business and the new company billed for the net costs involved.