Securities transaction

I thought I understood HMRC's stance on particular areas of the transactions in securities legislation. Say A sells his 100% shareholding of TradeCo to NewCo (owned 100% by him) in exchange for cash and loan then I would expect the transactions in securities legislation to apply charging the transaction to income tax as a distribution rather than capital gains tax (ITA 2007 ss 682 to 713).

However I recently heard a (national) firm advise that HMRC could only apply the legislation to the extent that the sales proceeds were represented by distributable reserves. In particular cases this could be very helpful. If much of the company's value is within internally generated goodwill then it would not be recognised in P&L reserve or share capital. A client could thus extract the majority of the company value at an effective tax rate of 10% ...