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SSE ― the main exemption

The substantial shareholding exemption (SSE) applies to disposals of shares and interests in shares by qualifying companies on or after 1 April 2002 and exempts gains from corporation tax in certain circumstances. Conversely if losses are generated by the disposal and the SSE conditions are met, they are not allowable.

Certain requirements must be met in respect of the investee company and the shareholding itself in order for the investing company to benefit from the exemption. The key conditions are as follows:

1. •

   at the time of the disposal, the investing company must have owned at least 10% of the ordinary share capital of the investee company for a continuous period of 12 months during the six years prior to the date of disposal

2. •

   from the beginning of the latest period of 12 months for which the substantial shareholding condition is met until the time of the disposal, the investee