A capital reduction demerger involves the top company of the target group reducing its capital, in consideration for which the demerged business is transferred to a new holding company that in turn issues shares to the shareholders.
Unlike a statutory demerger, a capital reduction demerger does not qualify for the tax reliefs that are specifically available for exempt distributions. It may, nonetheless, be carried out in such a way that it does not trigger tax charges for the shareholders or any of the
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