HMRC clearances
Certainty before you sign.
Many deal structures, such as share-for-share exchanges, reorganisations, demergers and company buy-backs, fall within anti-avoidance rules that HMRC could apply after the event. An advance clearance removes that uncertainty. The quality of the application matters: a clearance only protects you if it fully and accurately describes the transaction.
Clearances we apply for
| Clearance | When it's used |
|---|---|
| Section 138 TCGA 1992 | Share-for-share exchanges and reorganisations, confirming they're for genuine commercial reasons |
| Section 701 ITA 2007 | Confirming that the transactions in securities rules won't turn a capital receipt into income |
| Section 1091 CTA 2010 | Confirming that a demerger qualifies as exempt |
| Section 1044 CTA 2010 | Confirming capital treatment when a company buys back its own shares |
| Non-statutory clearance | Where there's genuine uncertainty about how the law applies to your transaction |
Several clearances are often combined into a single application.
How we help
- Advising on whether clearance is needed, or worth obtaining.
- Preparing a full, clear application that sets out the commercial reasons for the transaction.
- Handling HMRC's questions and follow-up.
- Building the timing into your deal timetable, so clearance doesn't hold up completion.
Proof
FAQs
Frequently asked questions
What is an HMRC advance clearance?
It's a written confirmation from HMRC, obtained before a transaction, that certain anti-avoidance rules won't be applied to it. It gives you certainty that the deal will be taxed as expected, provided all the relevant facts were disclosed.
How long does a clearance take?
For the main statutory clearances, HMRC must respond within 30 days of receiving the application, or of receiving any further information it asks for. Allow extra time in your deal timetable in case HMRC has questions.
Is clearance compulsory?
No, but for many share exchanges, reorganisations, demergers and buy-backs it's strongly advisable. Buyers and their advisers often expect it too.
What happens if clearance is refused?
A refusal doesn't necessarily mean the transaction is unacceptable, but it's a signal to review the structure. We'll advise on whether to restructure, provide more information or proceed without clearance.
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Need certainty before completion?
Talk to us early, so clearance fits your deal timetable.
Or write to taxadvisory@aswatax.co.uk
