Given the current macroeconomic environment, companies may struggle servicing debt or refinancing debt upon maturity, necessitating a restructuring of the debt and/or group as well as potential enforcement by creditors. It is important that the tax impact of debt restructurings is not overlooked otherwise there could be adverse tax implications, including tax leakage, the loss of tax assets or ‘secondary tax liabilities’.

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This article first appeared in Corporate Rescue and Insolvency Vol 17.2 April 2024.