Tax implications of establishing a joint venture company
Produced in partnership with Daniella Abel of Proskauer Rose (UK) LLP and Arun Birla, Hannah Gray and Abigail Hung of Paul Hastings (Europe) LLP
Tax implications of establishing a joint venture company

The following Tax guidance note Produced in partnership with Daniella Abel of Proskauer Rose (UK) LLP and Arun Birla, Hannah Gray and Abigail Hung of Paul Hastings (Europe) LLP provides comprehensive and up to date legal information covering:

  • Tax implications of establishing a joint venture company
  • Why use a JVCo?
  • Tax charges for the joint venture parties on the transfer of assets to the JVCo
  • Tax charges for the JVCo on the transfer of assets to the JVCo
  • Additional considerations where the JVCo is or becomes part of a group with one joint venture party

FORTHCOMING CHANGE on extending market value rule to transfers of unlisted securities to connected companies: Following a consultation on aligning the stamp duty and SDRT consideration rules that ran until 30 January 2019, Finance Bill 2019–20 extends, with effect from Royal Assent, the market value rule for stamp duty and SDRT purposes to transfers of unlisted securities to connected companies (ie where the transferor is (or is the nominee for a person that is) connected with the transferee company) but only where some or all of the consideration consists of the issue of shares. In its summary of responses to that consultation, HMRC confirms that, at this time, it will not be taking forward any of the other proposals made in the consultation.

FORTHCOMING CHANGE relating to a corporate capital loss restriction: Finance Bill 2019–20 will introduce a corporate capital loss restriction (CCLR), limiting companies’ use of carried-forward capital losses to 50% of their capital gains arising in an accounting period. Companies will have an allowance permitting them unrestricted use of up to £5m of capital or income losses per year. The CCLR will also apply to pre-entry capital losses in the limited situations in which these losses may be set off against capital gains. The CCLR will be incorporated within the existing rules imposing a corporate income loss restriction