When considering capital reorganisation as part of restructuring a business it is normal to inform HMRC that holdings are being changed and request clearance.
No money is changing hands in this situation but even so it seems that the accountants and tax advisors are becoming reluctant to advise companies on their capital reorganisation.
Rightly or wrongly accountants are concerned about their own liability given the perception that HMRC’s stance is to assume the purpose of reorganisation is tax avoidance and that any notification may lead to a demand for tax payments in advance, regardless of whether there is any money being made from the restructure.
This is often complicated by the purchase of debt at a discount as part of a financial restructuring alongside the capital reorganisation.
So as restructuring advisors, we are finding that some accountants we approach for advice on Revenue clearance don’t want to get involved for fear of being sued.
Has anyone else come across this?