Mr X owns 100% of Company A and 100% of Company B. Both are standard UK limited companies. Company A is VAT registered and has a loss making (-£20kpa) trading business and accumualted trading losses of £60k, plus financial investments of low 7 figures. Company B is not VAT registered and has financial investments of 6 figures.
There are no loans and no other features of the companies. They are now shells with cash accumulated from previous trading activities, which have ceased. The remaining small trading activity in Company A is from trying to start up a new business, but it hasn't taken off. In future, the combined entity would need be able to contain a trading activity, and cash which it can invest.
Can the companies be merged in any way to simplify accounting, and so that the owner does not incur a taxable event on selling the shares of Company B to Company A? Thank you.
Replies (9)
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How recently did trading activity cease?
Can he get BADR on his shares if winding up one or other or both? If not investigated/considered I would do so without delay to avoid any risk of possible future legal action for poor advice. Right now there may (there may not) be a window for low cost cash extraction that ought not be ignored.
Your MR X aren't you?
What does your Accountant say.
From previous posts, the OP seems to have an accountant who isn’t very good at dealing with the OP’s issues so he is forced to seek free professional advice from strangers.
... and, it is 12 months since the OP first reached out for advice. Time a plenty to find a replacement, or look for an additional specialist.
If I was in a position where I had 2 companies (1 with £100Ks investments and the other with £1Ms investments) and I didn't know what to do, I would seek paid advice from a specialist. I certainly wouldn't entrust it to a forum full of strangers - regardless of how good or relevant the answers may be!
Would anyone seriously expect mediWEB to diagnose and cure a serious illness based on a few snippets of information? (don't answer that, I think the answer is "probably some would")
Would anyone seriously expect mediWEB to diagnose and cure a serious illness based on a few snippets of information? (don't answer that, I think the answer is "probably some would")
No, we use Dr Google. Mrs ALISK is regularly using him to diagnose all sorts of horrendous / terminal illnesses from an e.g. nose bleed. It’s like Hugh Laurie is playing Dr Google.
[quote=Edward Stein]
"plus financial investments of low 7 figures. Company B is not VAT registered and has financial investments of 6 figures."
This needs proper planning - use some of the financial investments to pay for bespoke planning work?
Be careful if said planning is for the owner and his/her shares etc using company funds to pay for same.
If my client I would phone my paid for help line
Then charge client for the cost of call and my time
Blowed if I would trust some random strangers with big figure stuff