Share exchanges allow you to acquire shares in anothercompany by issuing shares in your own business to the target company’sshareholders. They are often used in mergers and acquisitions, corporaterestructuring and as part of succession planning.

They can be tax efficient, but under new stricteranti-avoidance measures introduced in the 2025/26 Budget, you must be able toprove to HMRC that the transaction is purely for commercial reasons and not togain a tax advantage. Tougher rules mean that HMRC can now target individualsteps within a transaction rather than the whole reconstruction, demerger orcompany sale if it suspects that the main purpose of the transaction is toavoid tax. It should also be noted that clearances obtained before November 262025 are only valid if the transaction completed before January 25 2026.

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