Finance Bill 2025-26 briefing: Anti-avoidance: company reconstructions and reconstructions involving transfer of business

The ATT has produced a Finance Bill 2025-26 briefing on clauses 37 and 38, which make changes to the anti-avoidance rules that apply to the ‘share reorganisation rules’ contained in the Taxation of Chargeable Gains Act (TCGA) 1992. 

We are concerned that these changes create uncertainty for companies and investors, and could affect genuine, non-tax motivated transactions.

We are also concerned that the 60-day transitional period was insufficient, particularly as it spanned the Christmas and New Year period. Transactions that were unable to complete within this window may need to reapply for clearance under the new rules, creating additional work for both taxpayers and HMRC and delaying the completion of commercial transactions. We strongly recommend extending the period to at least 90 days. 

The removal of the 5% threshold, which previously provided an exemption from the application of the anti-avoidance rules for small shareholdings, creates uncertainty, particularly for listed companies, and is likely to lead to increases in clearance applications, delays to transactions and increased administrative burdens. 

The legislation took effect immediately on 26 November 2025, without prior consultation, despite being described as a minor change with limited Exchequer impact. Many of the technical and practical issues now arising could have been identified and addressed through consultation. The combination of immediate commencement and limited guidance has created significant uncertainty.