CGT/Entrepreneur's Relief - Sale of shares to connected company
A Limited is owned by Mr A
B Limited is owned by Mr B
They want to bring their business interests together. Let's say Newco (owned 50:50 each) is formed and purchases the A Ltd and B Ltd shares from Mr A and Mr B. So Newco will own A Ltd and B Ltd. Messrs A and B will still own Newco 50:50.
To the extent that the consideration is cash/creation of a loan balance I'm guessing a gain will come into charge and they could claim ER?
Is there a mechanism for HMRC to disapply CGT treatment? I'm guessing there must be or some people could sell their company to a Newco every year to create a gain and a loan account balance? Could someone tell me what the mechanism is and whether a clearance is available to provide certainty of outcome?
Is HMRC's line of attack the TiS rules - and so is a s701 (the old s707) clearance the way to gain certainty?