PTP's Tax Tip No.15 - Taper relief and non-qualifying corporate bonds

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Q: After starting up in 1999, my client is selling his 100% shareholding in an unquoted trading company to an unquoted multinational. The purchaser has offered cash and loan notes. On a course the other day, I heard that non-qualifying corporate bonds allow taper relief to be preserved. Should my client ask for these?

A: No. Whilst it is true that, subject to clearance, taking non-qualifying corporate bonds means that they remain assets that qualify for taper relief, taking such bonds would mean that your client risked having his taper relief diluted if the issuing company ceased to be ' or never was ' the holding company of a trading group. This is an unquoted multinational ' do you know what the whole group does, or intends to do? Without a high degree of certainty about what its cu...

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