Share exchanges allow you to acquire shares in another company by issuing shares in your own business to the target company’s shareholders. They are often used in mergers and acquisitions, corporate restructuring and as part of succession planning.

They can be tax efficient, but under new stricter anti-avoidance measures introduced in the 2025/26 Budget, you must be able to prove to HMRC that the transaction is purely for commercial reasons and not to gain a tax advantage. Tougher rules mean that HMRC can now target individual steps within a transaction rather than the whole reconstruction, demerger or company sale if it suspects that the main purpose of the transaction is to avoid tax. It should also be noted that clearances obtained before November 26 2025 are only valid if the transaction completed before January 25 2026.

Exchanging shares can be complex, but we can guide you through the tax implications, minimising your tax exposure and submitting your HMRC clearance application for you.