are there any tax/legal implications in

are there any tax/legal implications in

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Are there any tax or legal restrictions or implications (other than related party disclosures) if a parent company wants to transfer a debt in its books (say to the director) to another group company? In this particular case, the transferee group company will take over the debt in exchange for settlement of its own debt to the parent. Many thanks.

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By User deleted
08th Apr 2014 15:34

Shouldn't be any implications ...

... other than paying lawyers to draft the paperwork. Strictly speaking, you cannot transfer, or assign, a debtor obligation (ie if it is the company that owes the money to the director) - what you are talking about is novation of the debt.

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By johngroganjga
08th Apr 2014 16:35

Obviously you need a creditor's consent to replace one debtor with another.  Otherwise I would have transferred my mortgage to my cat many years ago.  Assuming that consent is forthcoming all you need, as BKD says, is lawyers to draft the paperwork to make the new debts legal and binding, and of course enforceable in the event of default. 

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Replying to Livepay:
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By Duhamel
08th Apr 2014 16:37

Comment of the day

johngroganjga wrote:

Obviously you need a creditor's consent to replace one debtor with another.  Otherwise I would have transferred my mortgage to my cat many years ago. 


I think we need a comment of the day facility to appreciate John and his poor cat.
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