Since the COVID pandemic, and in an environment of rising costs, we have seen a lot of businesses seeking to simplify and rationalise their group structures in order to respond to M&A activity, remove unnecessary entities, or resolve distributable reserve blocks. Often this activity also involves rationalising and managing intercompany loan positions, and this can often be a challenging exercise. Such programmes can carry the risk of unexpected taxable gains arising, withholding tax challenges, or the potential claw back of previously deducted management expenses.
We can help understand the nature and history of intercompany balances and work with tax, accounting, treasury and legal teams to develop an approach which achieves the desired commercial objectives whilst mitigating the potential tax risks.