CG52574 - Share exchange: examples: the grouping exercise

For historical or commercial reasons a taxpayer or group of taxpayers may have developed their business interests through a number of associated companies. For example, a husband and wife or civil partners may own all the shares in a number of separate companies, each of which operates a shop. The individual companies will not be able to take advantage of the various reliefs that are given to groups of companies. Therefore, a group structure is created by putting a new holding company above all the companies or making one of the existing companies a new holding company. The holding company will acquire all the shares in the other companies in exchange for an issue of its own shares.