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Company A buying Company B - Approach or Impact?

Company A wants to buy Company B that is owned by two individuals - advice required..

I am not an accountant so am after some advice please.

I own Company A and am looking to purchase Company B that is owned by two individuals each with a 50% shareholding.

Company B has assets of £75k with net liabilites of £55k. Annual revenue of approx. £10k gross.

Company A is looking to buy 100% of the shareholding from the shareholders and keep Company B trading as an individual entity.

From a tax perspective what are the implications please?

Also, what are the implications of Company A lending to Company B?

Thank you in advance!


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16th Apr 2018 22:49

There are no tax implications for you of buying the shares, except that what you pay for them will be the baseline for the calculation of any future capital gain when you sell them.

The vendors will be making a disposal that may give rise to a capital gain, subject to the amounts involved etc., but that is a matter for them not you.

Why are you interested in buying shares in an insolvent company?

The implications of A lending to B are that A may not get its money back.

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17th Apr 2018 08:27

My advice would be to discuss this with your accountant at the earliest possible opportunity.

However, if you're not asking whether you should proceed or whether there are alternative ways to structure the deal, I agree with John's analysis.

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