A client owned two recruitment companies, one of which was profitable and the other with a history of loss making. They were keen to keep both brands and both businesses running but wanted to streamline the group and save costs.
Having examined various options with them, they decided to proceed with our recommendation, which was a procedure known as a “hive across”. This involves a complete transfer of the trade and all associated assets and liabilities from one company to the other, while using tax rules to legitimately preserve tax losses.
Although a hive across sounds straight forward enough on paper there are a number of tax, accounting, and more importantly commercial factors to take into account. By working closely together, we made sure that between ourselves and the client all of these were addressed and dealt with satisfactorily.
The process went smoothly with us guiding the client through every stage of the process and they now have one company with two trading divisions. Results have improved, thanks in no small part to the cost savings from a more streamlined operation, and the tax losses can be utilised against profits.
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