Share ownership

Share ownership

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Co A  and Co B both owned  100% by the same person

For co B to become a wholly owned subsidiary of Co A,

can a straight swap be done does this need HMRC approval for a straight swap - or is there CGT implications on the director/shareholder of B in that it is regarded as a sale of his co B shares to his co A  

what is the normal practice to effect this type of re-organisation ?

presumably co A will now hold ' investment in co B '  on its balance sheet..........value of nbv of B ?

also would be interested in the  consolidation - on elimination entries - & could anyone kindly advise,  presumably a completion/transfer date is required to cover pre acq reserves/profits in co B

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By johngroganjga
01st Oct 2013 10:13

Not sure what you mean by "straight swap".  Share for share exchange is the obvious way of achieving what client wants.  That should enable any capital gain to be held over.

The shareholding in B will sit on A's balance sheet at the fair value of the consideration received for the issue of shares.  The net assets of B at the date of acquisition will be a good starting point.

Your question about the preparation of consolidated accounts after the acquisition assumes that the group will be too big to qualify for exemption from preparing them.  Have you checked whether that is the case?

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