Client is a trading company with 105,000 issued shares, all at par, some pre 31/3/82, with available cash of at least £400,000. Shares are worth say £10 each, held by a number of shareholders, the majority by the directors and connected persons( ie family ).
Is it viable tax-wise ( time strictures apart! ) for :
1. The trading company A to lend the cash to another company B ( at present wholly owned by A ).
2. Shares in A to be exchanged for shares and cash in B ( say ratio 8:2 ) by 5/4/08
thus crystallising 31/3/82 values, indexation to 31/3/98 and BATR, the tax on gains from cash to be paid by 31/1/09 and on shares to be deferred upon sale of the B shares ?
Could B then enter into a buy-back scheme under S219 if clearance given to remove the minority ( around 6% ) and associated shareholders ( around 26% ) with the remaining cash?