Y plc is the principal company of a property group that includes a subsidiary company XLtd. X Ltd owns a property in the centre of London with a base cost of £1bn. The propertywas previously acquired from a fellow group company at no gain/no loss (TCGA92/S171) whenthe market value of the property stood at £900m. X Ltd issues shares to an unconnectedparty, B Ltd, to the extent that B Ltd holds 30% of the issued share capital of X Ltd andso X Ltd is no longer a member of the Y plc group. These new shares have very restrictedrights compared to those already in issue.

Want to read more?

This content requires a Croner-i Tax and Accounting subscription.

Existing subscriber? Log in

No subscription?

Contact us to discuss your requirements.