I have a client whom for historic reasons, owns the shares in two seperate companies but which have very similar trades. One has losses the other profits. To utilise the accumulated losses, I have suggested that the loss making company buys the shares in the profitable one from the client. This will then become a subsidiary, but customer base will be absorbed in loss making company and subsid will be wound up, client realising cash with taper relief. Any problems with this, provided value can be justified? Also taking things on when the FA investment (the subsidiary) is then wound up what are accounting entries, as investment in subsid nolonger exists but underlying goodwill does?
Andy Shady
3rd Feb 2006
0
Buying company for goodwill. Tax and accounting
Buying company for goodwill. Tax and accounting