The Financial Times reported on 25 May 2020 that the “V, U, W, L: are just some of the letter-shaped recoveries that investors have put forward as paths for the US economy once the worst of the crisis is over. The idea of a Nike swoosh recovery has taken hold, implying a rebound in economic activity that is flatter and slower than the drop. The most optimistic forecast – the V-shaped rebound – has been dismissed suggesting a much less robust resurgence after what may well be the worst downturn since the Great Depression.”
Given the many tax issues which the pandemic has created, for this article, we will only focus on the tax implications arising from business restructuring.
To weather the impact of the COVID-19 situation, many companies are looking into restructuring and reorganising their businesses.
What businesses should know if they intend to restructure? Are there any tax implications on the methods used to restructure or reorganise their businesses?