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Restructuring: Do You Need To Protect At Risk Trades Or Assets?

There are many reasons why the re-positioning of a company’s business or assets may be considered, but one of the key aims is usually to protect business activities or high value/key assets. For example, if a business has been negatively impacted by trading conditions, particularly in the current climate, there may be benefits in separating certain assets (e.g. trading property or key trading assets) from the main trading business, or separating parts of the business that are still performing well.

The approach to the re-positioning of assets is an important step and will vary depending on the circumstances.  Tax is an important consideration, and any tax cost should be factored into any decisions, but other factors such as ensuring your business is set up to facilitate your longer terms plans are also important.  For example, whilst the separation of trades can be useful for managing risks, it may also allow for different options when disposing of the business in future.

In cases where a company has traded successfully and accumulated assets, it is often sensible to re-position these assets to protect against business associated risks.   We recently worked with a client to create a new group structure that allowed excess cash and other valuable assets to be transferred to a new holding company, providing a layer of protection from trading risks.

Under the right circumstances, reliefs are available to mitigate tax costs involved, but a detailed understanding of these reliefs is important prior to implementation to ensure conditions for reliefs are met.

We have seen a rise in the number of business owners seeking to protect the wealth they have created and our Transaction Taxperts will work with you to ensure that any asset re-positioning meets your current needs and future plans, whilst also ensuring that with careful planning any tax costs can be mitigated.

You can read our article on ‘Do You Need To Separate Trade And Non-Trade Assets?’ here.

If you would like more information, or want to discuss asset positioning, please get in touch with our Transaction Taxperts today via [email protected] or call one of our offices.

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