Amalgamation rules clarified: assets, liabilities and shareholder continuity determine tax character and holding-period carryover. The amendment defines amalgamation to mean a company merger where all assets and liabilities vest in the amalgamated company and shareholder continuity is ensured by shareholders holding a specified minimum value of shares becoming shareholders of the amalgamated company, excluding mere purchases or distributions on winding up. It also adopts a rates in force concept linking tax-rate references to the relevant Finance Act for calculation and deduction purposes, and extends the capital gains holding-period rules to include the period shares were held in the amalgamating company when shares are received in consideration under the specified transfer exemption.
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Amalgamation rules clarified: assets, liabilities and shareholder continuity determine tax character and holding-period carryover.
The amendment defines amalgamation to mean a company merger where all assets and liabilities vest in the amalgamated company and shareholder continuity is ensured by shareholders holding a specified minimum value of shares becoming shareholders of the amalgamated company, excluding mere purchases or distributions on winding up. It also adopts a rates in force concept linking tax-rate references to the relevant Finance Act for calculation and deduction purposes, and extends the capital gains holding-period rules to include the period shares were held in the amalgamating company when shares are received in consideration under the specified transfer exemption.
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