Jul 152015
 

8140678383_b981c48d95No, it’s not really goodbye. Goodwill hasn’t gone away, it’s still there all right. A company that acquires a business is still required to write down the value of the purchased goodwill in its accounts. But from 8 July 2015, it will no longer be able to deduct the amounts written off when calculating its taxable profits.

This isn’t great news. Not great news at all – it was actually hidden away towards the bottom of the list on the relevant GOV.UK webpage. I only found it easily because I’ve got into the habit of looking for those Budget measures to be effective immediately, so I can start writing my own Budget page.

So what does it all mean? And why do I find myself laughing? Continue reading »

Corporate Tax Groups – Special rules for Investment Trusts, VCTs and REITs

 CGT, Corporate Groups, Investment Trusts, REITs, Venture Capital Schemes  Comments Off on Corporate Tax Groups – Special rules for Investment Trusts, VCTs and REITs
Feb 262015
 

It has been a while since we last discussed corporate groups, and the notion of intra-group transfers. In this article we shall look at the rules as they apply to investment trusts, VCTs, REITs and other types of company that have a special tax status.

(This article can be downloaded in pdf format at Academia.edu.)

Continue reading »

Rollover Reliefs and the Replacement of Business Assets Part Three – Rolling IP into Shares

 Corporate Groups, Corporate Tax, IP Tax  Comments Off on Rollover Reliefs and the Replacement of Business Assets Part Three – Rolling IP into Shares
Feb 222015
 

This is the last article in our series on asset rollovers. In Part One, we looked at capital assets, in Part Two we saw how IP rollovers work. In this part we shall see how it is possible to sell an IP asset and defer the tax by reinvesting the proceeds in the shares of a company, effectively looking through the corporate vehicle to the underlying IP that it holds.

(This article can be downloaded in pdf format at Academia.edu.)

Continue reading »

Autumn Statement 2013 – Buying Corporate Tax Losses – new rules for Holding Companies

 Corporate Groups, Corporate Tax, Tax Avoidance  Comments Off on Autumn Statement 2013 – Buying Corporate Tax Losses – new rules for Holding Companies
Jan 242014
 

There has been a welcome amendment to the rules that prevent the carry forward of corporate tax losses where there have been significant changes to the underlying business activities. The rules apply when a company undergoes a change of ownership, and they make perfect sense in the context of a company takeover.

However, one would not expect tax losses to be restricted when the corporate group has undergone an internal restructuring. There is less justification for this, given that a restructuring doesn’t usually result in a change in the underlying economic ownership of the assets involved.

And indeed, as we shall see, the rules don’t apply when the target is a subsidiary that is being transferred from one group company to another. Unfortunately, the exception doesn’t extend to the introduction of a new holding company.

This situation is to be remedied in the next Finance Act. The changes will take effect from 1 April 2014. Continue reading »

The Degrouping Rules and the Subgroup Exception – what does the legislation say?

 Corporate Groups, Corporate Tax, IP Tax  Comments Off on The Degrouping Rules and the Subgroup Exception – what does the legislation say?
Aug 232013
 

In our last article on corporate groups, we looked at the subgroup exception as it applies to intra-group transfers. We showed, using both numerical and visual examples, why there should be an exception. In this article we shall see how the tax legislation ensures that this is indeed the case. As before, we shall be concentrating on the rules for capital assets – the rules for IP are similar. Continue reading »

The Degrouping Rules and the Subgroup Exception – an Overview

 Corporate Groups, Corporate Tax, IP Tax  Comments Off on The Degrouping Rules and the Subgroup Exception – an Overview
May 062013
 

As has been stated in previous articles, the degrouping rules are designed to prevent assets from being smuggled out of a group tax free under the protection of a corporate wrapper. This is achieved by imposing a tax liability when a company acquires an asset from a fellow group member and subsequently leaves the group within the next 6 years. 

But for every rule, there is an exception. Continue reading »

Corporate Groups and the Degrouping Rules – Comparing Capital Gains and IP Groups

 Corporate Groups, Corporate Tax, IP Tax  Comments Off on Corporate Groups and the Degrouping Rules – Comparing Capital Gains and IP Groups
Apr 222013
 

We have seen in previous articles how the degrouping rules operate to prevent the use of a corporate vehicle to shelter taxable gains. There are two sets of rules, one for capital assets and the other for intangibles (“IP”). In this article we shall look at how these rules differ, giving a specific example involving a business sale.

(This article can be downloaded in pdf format at Academia.edu.)

Continue reading »

Corporate Tax Groups – Degrouping IP

 Corporate Groups, Corporate Tax, IP Tax  Comments Off on Corporate Tax Groups – Degrouping IP
Apr 212013
 

In this article, we shall discuss the degrouping rules as they apply to intangible assets such as IP and goodwill (collectively referred to as IP). The tax treatment is similar to that applying to capital assets, but with important differences.

(This article can be downloaded in pdf format at Academia.edu.) Continue reading »

Corporate Tax Groups – the Capital Gains Degrouping Rules – Part Two

 Corporate Groups, Corporate Tax  Comments Off on Corporate Tax Groups – the Capital Gains Degrouping Rules – Part Two
Mar 192013
 

In Part One, we saw how the degrouping rules prevent capital assets from leaving a group tax free within a corporate wrapper. This article finishes off with a few miscellaneous, but important points concerning the operation of these rules.

(This article is Part Two of a two part mini-series on the Capital Gains Degrouping Rules. Both parts can be read in a single article in pdf format which can be downloaded at Academia.edu.)

Continue reading »

Corporate Tax Groups – the Capital Gains Degrouping Rules – Part One

 Corporate Groups, Corporate Tax  Comments Off on Corporate Tax Groups – the Capital Gains Degrouping Rules – Part One
Mar 172013
 

This is the third article in our series on corporate tax groups where we explore the rules governing intra-group transactions, and how they are taxed. In this article we shall look at the rules relating to capital assets.

(This article is Part One of a two part mini-series on the Capital Gains Degrouping Rules. Both parts can be read in a single article in pdf format which can be downloaded at Academia.edu.)

Continue reading »