The Substantial Shareholding Exemption (SSE) is a tax relief available in the United Kingdom that allows companies to sell shares in other companies without having to pay tax on the profits made from the sale. The SSE applies to companies that hold at least 10% of the shares in another company and have held those shares for at least 12 months.
The purpose of the SSE is to encourage investment in other companies and to remove any disincentives to selling shares that a company may hold in another business. This tax relief applies to both UK and non-UK resident companies, but there are certain conditions that must be met in order to qualify for the exemption.
To be eligible for the SSE, the company must have held the shares for at least 12 months before selling them. The shares must also represent at least 10% of the voting rights in the company that is being sold. If the company being sold is a trading company or the holding company of a trading group, the seller must have been a trading company or the holding company of a trading group throughout the 12-month period preceding the sale.
If the conditions are met, the profits made from the sale of the shares will be exempt from corporation tax. The SSE is a valuable tax relief that can help companies to avoid paying large amounts of tax on profits made from the sale of shares in other companies.
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