Possibly more of a legal question. This is a group restructure excluded from CGT and stamp duty therefore. NAV of the companies being sold to the midco was used as consideration rather than the book value. This will create a loss in the holdco. The forms have been submitted to HMRC but we need to get it amended. I think there is a protocol to do so. Anybody come across it before? Thanks
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For clarity, do you mean holdco has disposed of a number of subsidiaries to a Newco (Midco)? Do you know the method of transfer was it either a distribution-in-specie or as you have said forms, was it a share-exchange of some description?
What does the final group structure look like?
I may be missing something but I’m not sure what the consideration was? No cash but what, something to do with net asset value of the company?
In any case, can’t you just revalue the investment in holdco to fair value (which would be the same as pre-transfer if holdco is still the ultimate owner of everything)? Although I point out I am more of a tax advisor than an accountant.
So if I have this right, you had a parent co with (at least) two subs, it sold one of the subs to the new midco for its balance sheet value? This created a loss in holdco as the investment value was higher than the shareholders funds in the sub?
Who came up with the values and did the paperwork to HMRC, the solicitors?