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Three questions

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Knut Anders Fosters Voles
December 30, 2020, 7:38pm
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Quoted from RonMariner
My understanding is that The Club own BP, but that Fenty's loans are secured on it, i.e. if the club defaulted he could force the sale of BP to pay off his loans.  When his loans are repaid this lein in hios favour would thus end.

It would be interesting to see how the l;oan element of the deal is transacted. If the consortium buy the loans then there will still be a debt in the balance sheet, but now to the new owners rather than Fenty. This may still be secured on BP.  

The other option is that Fenty gets his £2.5 mill and waves the loans. However under this scenarios I think the club may have a tax problem in that waiving the loans may give rise to a taxable gain of £1.5m?

Another option is that the loans are 'repaid' to Fenty by issuing £1.5m shares, which he then sells. Not sure if that would get round the tax issue but it would leave the club debt free. I am not a tax accountant and so can't speak with any authority on this.

Anyone have any knowledge on this?



If the loan to the company is written-off the company will have a non-trading loan relationship credit equal to the amount written off.

JSF will crystalise a capital loss equal to the amount of the loan written off. This will be available to set off against capital gains arising in the year of write-off or in subsequent years
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ginnywings
December 30, 2020, 7:45pm

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Can't say I'm bothered. Never used to give board members a moments notice until recent years and I hope it goes back to that state of affairs.

I suspect the new lot know what they are doing.
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lew chaterleys lover
December 30, 2020, 7:56pm
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Quoted from Knut Anders Fosters Voles



If the loan to the company is written-off the company will have a non-trading loan relationship credit equal to the amount written off.

JSF will crystalise a capital loss equal to the amount of the loan written off. This will be available to set off against capital gains arising in the year of write-off or in subsequent years


Yes, that's what I would do...

...
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RonMariner
December 30, 2020, 11:35pm

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My tax accountant friend says that if the consortium pump in the money as share capital and then the club uses the cash to repay the loan then there is no tax liability on the club, which would then be debt free.

That would be a good outcome for the club.
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