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Down and out?
Key points
- Companies in administration or liquidation may face restrictions on group transactions.
- Does a company have distributable reserves?
- Connected companies and loan waivers.
- Administration will break the connection and may result in the loss of group relief.
- Liquidation will end a company’s existence.
- Entitlement to the substantial shareholding exemption.
Amid falling profits and asset values many companies will find themselves where they do not want to be – whether with a lack of reserves in administration or in liquidation. Putting aside the limited scope for tax planning in these scenarios some issues are worth considering particularly the tax consequences of even the simplest group transactions. These include the transfer of assets around a group the waiver of debt and the use of tax losses.
To illustrate these issues we will consider the position of the Piste Group.
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