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Protecting Assets within a Group

Companies with valuable property (or other) assets sat in their trading companies should consider reorganising their structure to try to ring-fence these valuable assets from trading risk.

If there is already a group structure, then it should be relatively straightforward to transfer assets to achieve this commercial aim. There are some tax points to consider before doing so, not least VAT and SDLT, but broadly we would expect that a transfer of property between group companies could be carried out on a tax neutral basis.

If the trading company is ‘standalone’, then inserting a new holding company to create a group before going on to reorganise the asset owning structure should be considered. Again, we would broadly anticipate this could be achieved on a tax neutral basis too, but the shareholders’ tax position would also need to be reviewed before inserting a holding company.

We would be very happy to arrange a call to discuss the tax points to consider around these types of reorganisations.

Of course, if a business is already (or might be) in financial difficulties then advice should also be sought on directors’ responsibilities and the potential ramifications of insolvency, as transactions undertaken to protect assets from creditors are at risk of being unwound.


Posted on 27/05/2020 in Tax News, Property Tax News, Tax and Covid-19

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