Company C's sole asset is a restaurant. The company has traded for four years and is now in its fifth year. Accumulated losses are £200,000. The sale price is £600,000. It is proposed to sell the freehold building, all fittings, stock and goodwill and to retain the company and its losses. (Should the purchaser wish to buy a company, we shall employ the usual hive-down method.)
A sale of the business or of the hive-downed company will leave C with no trade and no asset except the losses.
Company C's sole asset is a restaurant. The company has traded for four years and is now in its fifth year. Accumulated losses are £200,000. The sale price is £600,000. It is proposed to sell the freehold building, all fittings, stock and goodwill and to retain the company and its losses. (Should the purchaser wish to buy a company, we shall employ the usual hive-down method.)
A sale of the business or of the hive-downed company will leave C with no trade and no asset except the losses.
It is proposed to start a new restaurant and the question is will C be allowed to start up a restaurant and use the carried forward losses against future profits? Is there a time limit within which the new restaurant must be acquired?
Any suggestions on how to achieve our object will be gratefully received.
Query T16,646