Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Readers' forum: Another whitewash

11 August 2015
Issue: 4513 / Categories: Forum & Feedback
Can a purchase of a trading company be made with its own financial assistance?
A husband and wife own all the issued share capital of a holding company which has a 100% owned trading subsidiary. This was established before the general prohibition of financial assistance by a trading company to the acquisition of its issued share capital. As a result a whitewash procedure was instigated. The subsidiary advanced the consideration to the holding company and then declared dividends to it. These were not paid and extinguished some of the original indebtedness – the process should be completed in the next year or two. The husband and wife are working directors but their health is deteriorating and they want to sell their shares to an acquaintance. The trading subsidiary continues to be profitable.
The acquaintance has the experience to take over the business but not the funds. The plan is that he will own all...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon