Readers’ forum: Tax costs for splitting business

Our client has a trading company that is owned by two sets of brothers and their wives (the shareholding is split 25% for each shareholder). The company (Co X) runs a successful gym chain over two locations in the UK – with one brother essentially running one location (site A) and the other brother involved in the second location (site B). The brothers have had a disagreement and want to go their separate ways. Brother A and his wife want to retain the current brand and run the business through Co X on their own while the brother B and his wife are happy to rebrand and start a different gym under a different name and company.

The only other assets held by Co X (other than the brand and customer lists) is stock and equipment. The company does not own the buildings from which the gym trade is run....