Budget 2016: Reform of substantial shareholdings exemption

Substantial shareholding exemption (SSE) was introduced in 2002, exempting certain corporate share disposals from corporation tax. It was introduced to ensure that the UK remained competitive, providing a UK participation exemption.

The government will consult on the continued relevance of SSE, recognising that there have been significant developments in the UK and international corporate tax landscape since the SSE was first introduced.

The consultation will consider whether SSE is still delivering on its original policy objective and whether there could be changes to its detailed design in order to increase its simplicity, coherence and international competitiveness.

SSE provides a useful relief for groups of companies when they sell a subsidiary. However, the rules are complex and simplification would be welcome.