As businesses grow and evolve, their structures often need to do the same. Whether you’re expanding into new markets, preparing for succession, or simplifying group arrangements, making structural changes through a reorganisation or demerger can help position your business for long-term success. But with complex tax rules in play, getting the right accountancy and tax advice is essential.
At Dunkley’s Accountants in Bristol, we work with businesses of all sizes to deliver clear, practical guidance on reorganisations and demergers. From concept to completion, our team can support you with the planning, execution, and clearance applications that help protect your position and give you confidence with HMRC.
What Are Reorganisations and Demergers?
A reorganisation is a broad term that refers to changes in the structure of a business or group of companies. This could involve consolidating multiple companies, separating trading activities, or transferring assets and shares between entities.
A demerger, on the other hand, usually refers to the splitting of a business into two or more separate companies. This is common in situations where:
- Family members or shareholders wish to run different parts of a business independently
- A business wants to ring-fence risk or separate trading and investment activities
- A group is preparing for a future sale, merger or exit
Each scenario presents opportunities for commercial clarity – but also potential tax pitfalls if not carefully planned.
Why Tax Advice Matters
In any restructure, tax consequences can arise across several areas:
- Capital Gains Tax (CGT) on transfers of shares or assets
- Corporation Tax implications on intra-group transactions
- Stamp Duty on the transfer of shares
- Income Tax issues where value is extracted from the business
- VAT and employment tax considerations
That’s why tailored tax advice is crucial. At Dunkley’s, we take time to understand your objectives, model the implications, and ensure your plans are as tax-efficient as possible – all while remaining fully compliant.
Clearance Applications: Peace of Mind from HMRC
For many transactions, especially those involving CGT or corporation tax reliefs, HMRC allows you to submit a statutory clearance application before going ahead.
Clearance applications give you the opportunity to explain your proposed transaction to HMRC and ask them to confirm, in writing, that specific tax rules or exemptions will apply – assuming the facts remain the same. These are commonly used for:
- Demergers under Sections 110 or 162 of the Insolvency Act
- Transactions involving share exchanges or asset transfers
- Substantial shareholdings exemptions or group relief planning
While clearance is not always legally required, it provides significant reassurance – especially where large sums, multiple parties, or future risks are involved.
Our team regularly drafts and submits clearance applications on behalf of clients across Bristol and beyond. We ensure the technical arguments are robust, the documentation is accurate, and the timelines are managed efficiently.
Common Reasons for Reorganisations and Demergers
Reorganisations aren’t just for large corporations – in fact, many of our clients are owner-managed businesses and family-run companies. Common triggers include:
- Succession planning: separating business interests between family members
- Business sales: demerging trading operations to streamline a sale
- Risk management: separating property assets from trading activities
- Efficiency: reducing administration or costs within a group
- Investment readiness: restructuring for external investment or growth
Whatever the motivation, it’s important to approach the process with a clear understanding of the commercial and tax impact.
How Dunkley’s Can Help
At Dunkley’s Accountants, our expert team combines technical tax knowledge with real-world commercial awareness. Based in Bristol, we support clients throughout the South West and across the UK. Our experience includes:
- Advising on the optimal structure for demergers and group reorganisations
- Preparing detailed project plans and timelines
- Drafting and submitting clearance applications to HMRC
- Liaising with legal and financial advisers to ensure all aspects are covered
- Offering post-reorganisation support and compliance services
Whether you’re preparing to restructure now or just starting to explore your options, we’re here to help with friendly, proactive advice. Get in touch today on 01454 619900 or email advice@dunkleys.accountants.