Forming newco under holdingco, transfer of funds?

Liquidating assets in company under holding co to transfer funds to newco.

Didn't find your answer?

Could do with some opinions on this as our current accountant isn't too forthcoming with answers. 

Currently my father and uncle both directors, farm under one company on two seperate farms. Farm A uncles, Farm B fathers. 
Father wants to liquidate his farm B and use that money in a newco (will not be farming) thats not controlled by his brother as currently brother has overriding control of current company. Once all funds are within current company how best would it be to proceed to transfer to newco without incurring double tax or it going down as loan? Father wants to go his own way and uncle is in agreement. We have tried asking accountant but they havent really answered the question, rather skirted around it. I have been looking at the possibility of creating a holding co for both current co and new co uncle and father being 50% each, and then once liquidation is complete and corp tax paid funds transferred to newco via divedend? Then a share exchange swapping fathers shares in oldco for uncles shares in newco so father gains majority shareholder in newco. Then dissolve holding company. Or would it just be as easy getting clearance from HMRC for this transfer? There must be a simpler way,  it may be time for a new accountant and a chat with solicitor!  Apologies if this is not understandable and I gather way too many variables to provide a solid answer. Many thanks for any help. 

Replies (3)

Please login or register to join the discussion.

By David Ex
19th Oct 2023 09:59

JustJimmy wrote:

Could do with some opinions on this as our current accountant isn't too forthcoming with answers. 


You need to get an accountant who can advise you adequately.

Thanks (0)
By Duggimon
19th Oct 2023 10:07

It is entirely possible your current accountant isn't able to advise on this kind of complex process of transactions. I would recommend trying again with them and if they can't give you a detailed clear answer on it ask them if they can recommend someone, or do some research yourself and find a different accountant off your own back.

Absolutely do not try to do this based on internet forum answers and self driven research.

Thanks (0)
By Ruddles
19th Oct 2023 10:08

Looks like a prime candidate for a demerger. Possibly one for an accountant with experience in such matters, but not necessarily requiring a wholesale change of accountant - we regularly undertake restructuring exercised for clients of smaller local accountants.

Thanks (1)