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?

Thoughts appreciated

Cheers

Comments
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Transactions in securities

gbuckell |
gbuckell's picture

@Graham

George Attazder |
George Attazder's picture

75%

gbuckell |
gbuckell's picture

Yes but

George Attazder |
George Attazder's picture

.

blok |
blok's picture

Interesting

gbuckell |
gbuckell's picture

My suspicion would be...

George Attazder |
George Attazder's picture

Result of further reading...

secondhand_22 |

Unlikely

gbuckell |
gbuckell's picture

Ooh... I'd forgotten that the OP had come back on this

George Attazder |
George Attazder's picture

Fundamental change of ownership exemption

Marrster10 |