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A client wants to buy 100% of the shares of a trading company ('TC'). He needs a loan to complete, but he does not want to risk his other assets. His bank is willing to lend money to a holding company ('Newco') with no recourse to the director/shareholder. Newco will then purchase all of TC shares. Our questions are as follows.
A client wants to buy 100% of the shares of a trading company ('TC'). He needs a loan to complete but he does not want to risk his other assets. His bank is willing to lend money to a holding company ('Newco') with no recourse to the director/shareholder. Newco will then purchase all of TC shares. Our questions are as follows.
1. Can the loan interest paid by Newco be group relieved to TC?
2. Will business asset taper relief be available on the sale of the Newco shares?
3. If Newco sells TC will the gain be tax free under the disposal of substantial shareholding rules?
Readers' comments will be appreciated.
Query T17 007 – PKS.
Reply by Exile:
This question is capable of a fairly short answer even if I add something not already asked. The bank will probably be taking some security from the...
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