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Taxing bother for M&A particular function autos

In a hunch sale, corporations, entities or property are bought lock, inventory and barrel on a going-concern foundation.

Synopsis

Virtually all giant offers in 2020 and 2021, the place personal fairness or different strategic buyers picked up stakes, had been structured utilizing a particular function automobile (SPV) to securitise property in a separate firm, say trade trackers. The brand new rules by CBDT mandate that corporations worth the transferred property at a “honest market worth.”

Mumbai: Numerous current merger and acquisition (M&A) offers, the place the promoters created both separate corporations or subsidiaries for the only function of promoting stakes, might invite tax scrutiny because of the new hunch gross sales rules.

Virtually all giant offers in 2020 and 2021, the place personal fairness or different strategic buyers picked up stakes, had been structured utilizing a particular function automobile (SPV) to securitise property in a separate

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