Certainty from HMRC, before any step is taken.

It depends on the route. Most demergers combine some of these: section 138 TCGA 1992 for share exchanges and reconstructions, section 139(5) TCGA 1992 for business transfers between companies, section 1091 CTA 2010 for statutory demergers, and section 701 ITA 2007 for the transactions in securities rules. Where a company rather than an individual receives value, section 748 CTA 2010 may be added. The application lists every provision relied on.

Yes. The statutory clearances for reorganisations are dealt with by HMRC's Clearance and Counteraction Team, and a single application can ask for clearance under several provisions at once, as long as it lists each of them. This keeps the facts consistent across every clearance and means HMRC sees the whole transaction together, which is usually what it wants.

Applications are normally emailed to HMRC's reconstructions mailbox, with attachments under 2MB, or posted to HMRC's clearance address. Applications that could affect a quoted company's share price, or involve the finances of well-known individuals, should be clearly marked as market sensitive. We prepare, submit and follow up the application, and deal with HMRC's questions.

It's the clearance for a statutory demerger. It asks HMRC to confirm that a proposed distribution will be an exempt distribution under the demerger rules in CTA 2010. It's only relevant where a statutory demerger is used, which needs trading activities on both sides. A related clearance under section 1092 confirms that a payment won't be treated as a chargeable payment, which can otherwise be taxed as income.

It relates to the corporation tax relief that lets a company transfer its business to another company under a scheme of reconstruction at no gain and no loss. Since 26 November 2025, that relief can be counteracted where a main purpose of the arrangements is to reduce or avoid capital gains tax, corporation tax or income tax. Clearance under section 139(5) confirms, before the transfer, that HMRC is satisfied that rule won't apply.

Because most demergers involve shareholders receiving new shares in place of old ones, which relies on the reconstruction or share exchange reliefs in sections 135 and 136 TCGA 1992. Those reliefs are subject to an anti-avoidance rule in section 137. A section 138 clearance confirms HMRC's view that the rule doesn't apply. It must be obtained before the shares are issued.

Because a demerger moves value between companies and shareholders, and the transactions in securities rules in ITA 2007 can tax a receipt as income where a main purpose is to obtain an income tax advantage. A clearance under section 701 ITA 2007 confirms that HMRC won't use those rules against the transaction. It's routinely included in demerger applications involving close companies.

Usually not. Section 1044 CTA 2010 is the clearance for a company buying back its own shares and wanting capital treatment for the seller. It's only relevant if a buy-back forms part of the plan, for example where one shareholder takes cash rather than a business. For most demergers the relevant clearances are under the TCGA 1992, the demerger rules in CTA 2010 and the transactions in securities rules.

HMRC should reply within 30 days of receiving a complete application. If it asks for more information, it should respond within 30 days of receiving the reply. In practice, a clear and complete application is the best way to avoid follow-up questions. We build the clearance period into the timetable so it doesn't hold up a refinancing, a sale or a year end.

At a high level: who the companies and shareholders are, the shareholdings before and after, each step in order with diagrams, any consideration, the latest accounts, the commercial reasons for the demerger and anything planned afterwards, such as a sale or gifts. It also lists each provision under which clearance is sought. Full and accurate disclosure is what makes the clearance worth having.

Common reasons include letting separate businesses be managed and financed independently, protecting property from trading risk, shareholders wanting to go their separate ways, and succession, where different family members will run different businesses. What matters is that the reasons are genuine and consistent with the steps proposed, and that the arrangements as a whole aren't mainly about avoiding tax.

A refusal isn't a finding that tax is due, but it is a clear warning. HMRC usually asks questions before refusing, and those questions often show what is worrying it. The options are to provide further explanation, change the steps or proceed without clearance and accept the risk. Because nothing has been implemented, the plan can still be adjusted.

No. There is no statutory clearance procedure for SDLT. The SDLT reliefs that often apply on demergers, group relief and reconstruction or acquisition relief, are claimed on the SDLT return and can be checked by HMRC afterwards. That makes careful analysis before completion important, alongside the clawback periods that can apply for three years afterwards.

Stamp duty reliefs for reconstructions and share-for-share acquisitions, under sections 75 and 77 of the Finance Act 1986, aren't covered by the statutory clearance application. Instead, the transfer documents are sent to HMRC's Stamp Taxes team for adjudication, which is compulsory to obtain these reliefs. Once adjudicated, the stamp duty position of that document is settled.

It's HMRC's written view on how the law applies to a transaction where there's genuine uncertainty, offered through its non-statutory clearance service. HMRC usually replies within 28 days. It isn't available where a statutory clearance applies, and HMRC won't use it to approve tax planning. For demergers, it's occasionally useful on a point that the statutory clearances don't cover.

Only for the transaction as described. A clearance applies to the facts and steps set out in the application. If the steps change, or something material wasn't disclosed, the clearance may not protect you. If the plan changes before completion, it's usually best to update HMRC and, where necessary, obtain a fresh clearance before going ahead.

Yes. A company that makes an exempt distribution must make a return to HMRC within 30 days of making it. Where clearance was obtained in advance, the return can simply confirm that. A similar return is needed for chargeable payments made within five years after an exempt distribution. We include these filings in the post-completion checklist.