The SSE is a beneficial and attractive UK exemption from corporation tax for gains arising on the disposal of substantial shareholdings by corporate taxpayers. There are several technical conditions to be satisfied before the exemption applies.

As there have been significant developments in the UK and international corporate tax landscape since the SSE was first introduced, over the summer the government consulted on the extent to which the SSE is still delivering on its original policy objective of ensuring that tax does not act as a disincentive to commercially desirable business.

Following this consultation, the government announced that from April 2017 the SSE rules will be simplified. No detail has yet been available, but in broad terms it is stated that the conditions that currently applicable to investors will be removed and an exemption for institutional investors will be introduced.

These changes should increase the scope of the SSE and remove some of the complexity to assesses eligibility, thereby increasing the competitiveness of the UK as a headquarters jurisdiction against other jurisdiction with flexible participation exemptions such as the Netherlands and Luxembourg.