Two become one
I prepare the accounts for two 'related' LTD companies. They carry out a very similar trade and have a similar shareholding which is all within one family. For the ease of accounting they no longer wish to trade these as separate companies. The option is to either set up one brand new company which 'purchases' the assets/business etc of the other two or one of the existing companies takes on the business/assets of the other.
One of the companies carries significant tax losses which I understand I could hopefully get advanced clearance from HMRC to transfer over and continue to use against that portion of the business. However, what I am really struggling with is the accounting transactions relating to the 'purchase(s)' without the need for any money to change hands. It is the intention the old companies will continue but in a dormant state.
Also, are there any other potential pitfalls (CGT?) etc that I need to be mindful of?
Form a group
As you suggest, if you simply form a new company to buy the assets, what happens to the consideration? Also is there goodwill in either business. A simple sale would trigger a profit. Unless the numbers are very small, it is likely to be better for one company to acquire the other in exchange for an issue of shares. The business of the subsidiary is then transferred to the parent. You could also form a new company that acquires both old companies and hive the trades from both subsidiaries into the new parent. Keeping an old company to trade with may be more attractive as it has a track record for credit purposes.