Footy funding

I was recently asked how the acquisition of a company could be effectively self-financing (as the Manchester United acquisition allegedly was) and in a tax-efficient manner.

I wondered whether the solution might be to acquire the target trading company via a holding company.

The holding company's loan for the acquisition would be funded via dividends from the target trading company.

The loan interest payments by the holding company would create a loss (or a non-trading loan relationship deficit) which could then be surrendered to the target trading company.

The result would be that the trading target had funded its own acquisition and received tax relief on the interest element.

Do readers consider that this strategy works or is there a better more tax-efficient way? Does the location of the company (in the UK or abroad) make any...