Client company is looking to purchase another business and is looking to purchase all shares in business, price is £500k which is to be paid as follows:
£200k paid direct from client company, and £300k paid following purchase (effectively same or next day) using £300k in cash in purchased company, which would vote dividend to client company once it takes over. Both are UK companies and as far as I can see at present would be eligible for exemption on dividend from subsidary (this will obviously be confirmed).
Does this work without triggering any tax liability for my client company?
As an additional question I would assume that if the purchase of shares was split between client company and individual (50/50) this would cause issues with the use of the cash in the purchased company as individual would be taxed on their share of the dividend?
Many thanks for any thoughts.