My client owns two companies, A Ltd and B Ltd. A Ltd sold its trade a couple of years ago and realised a capital gain, The intention was to buy a new business but the deal fell through. Meantime we have claimed provisional rollover relief on a £600k gain. The clock is ticking and we are getting concerned that A Ltd will not be able to reinvest in time to preserve its claim. Can it buy B Ltd's trade and assets as its "new assets"?
I cannot find any rule against it, but I am trying to prove a negative.
The market value is about right - more than A Ltd received on the sale of its old assets, and B Ltd would only have a small CG, or maybe none at all. There would be an SDLT problem, but that would be significantly less than the CT on the existing gain.
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I can see nothing that prevents what you suggest, other than Ramsay and the GAAR, but I doubt that they would be rolled out for what is, after all, a deferral of tax (which might ultimately tend to zero) in the long-term.