Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166

Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166

A Company Tax Break for Capital Losses

This years Finance Act included an important change to the rules on capital losses made by group companies. What was his and how can you be sure your company qualifies?

Buying Capital Losses

For years the practice of one company buying another just to get its hands on capital losses that the other had accumulated was commonplace, especially amongst big businesses. The losses could be used to reduce tax on capital gains the takeover company expected to make in future. It was a neat piece of tax planning which meant that the buying company not only aquired another business, it also secured itself a reduction in its future tax bills. Naturally the Taxman wasnt happy about this and  a raft of anti-avoidance rules were brought in to stop what he consideredan unfiar tax advantage. A sledgehammer to crack a nut!

Anti-avoidance Trouble

The trouble was that these anti-avoidance rules also blocked the use of so-called pre-entry losses in the case of genuine company takeovers and mergers, even at grass roots level. For example, shareholders who together personally owned a number of businesses and wanted to consolidate these into a single group of companies would find pre-entry capital losses couldnt be shared. The good news is that the government has realised the unfairness of the anti-avoidance rules and relaxed, but not removed, them with effect from July 19.

Are Losses a Commerical Reason?

In practice its essential when bringing another company into a corporate group that you consider the tax concequences of doing so. Contrary to the Taxman's paranoia, this doesnt mean that any tax advantage gained is the main purpose of the excersise. Therefore, providing the primary reason for the transaction is a commercial one, the ani-avoidance rules wont apply.

Tip: You can ask the Taxman in advance of a change in company ownership of group structure for confirmation that the pre-entry loss anti-avoidance rules wont apply. He's not bound by his reply, but as long as you provide him with full and accurate facts its very unlikley he would change is mind. You should anyway obtain the usual statutory rulings regarding the tax treatments of the transaction itself and you can include your request for a view on pre-entry losses at the same.

How Will the Losses Rules Work Now?

The recent relaxation in the rules doesnt apply to "realised" pre-entry losses ie. those resulting from transactions already completed before a company is taken over/merged with another. But subsequent to July 19, where the company which has been aquired owens assets, for example its trading premises, which results in a capital loss when its sold after takeover, that loss can be used by the takeover company or another company in the corporate group to set against its capital gains.

Summary

From July 19 capital losses made by one company can be used by another in the same group to set againt its capital gains where the loss was accumulated, but not realised, before the company was part of the group. You can ask the Taxman for advance confirmation that this new tax break applies.

 

If you would like any more information or advice about tax or this particular matter, please contatc us on 0191 386 4786 for a free initial meeting

 
Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166

Categories

    Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Company News (1)
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Tax Issues (79)
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Capital Gains Tax (10)
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Corporation Tax (12)
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Income Tax (5)
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Inheritance Tax (22)
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Stamp Duty/Land Tax (0)
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • VAT (24)
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Newsletter (192)
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Guest Blog (5)
Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166

 

How can we help?

We are a proactive firm of accountants who can assist you in all your financial needs in a friendly, efficient and professional manner.

Building partnerships, listening to your needs, and implementing a solid financial strategy is the backbone of our practice. 

Why work with us?

Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 About Us
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Contact Us
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Disclaimer
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Privacy Policy
Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Accounting
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Tax Planning
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Business Planning
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Exit Strategy
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Tax Investigation Service
  • Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Sage Support
Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166 Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166
Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /home/sites/westwaters.co.uk/public_html/framework/lib/sddb.class.php on line 166