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Capital Reduction Demerger

A capital reduction demerger is where a company reduces its share capital and simultaneously transfers assets to a company owned by its shareholders.

A capital reduction demerger can be used to split a corporate group by a parent company transferring a subsidiary to a new company owned by the shareholders. This structure does not require the company to have distributable profits and can be more tax-efficient for the company’s shareholders.

Our recent experience:

Capital reduction demerger and restructure for medical equipment distribution business: Implementing a demerger and restructure to separate out its different businesses in advance of a £12m sale.

Capital reduction demerger and restructure for a facilities management business: Advising on a demerger to separate out the group’s non-essential subsidiaries prior to a £10m sale of part of the group.

Click here to see our case study.

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