It is a most complex task navigating one's way through the tax legislation and HMRC Manual references in order to ascertain the quantum of accumulated trading losses in an insolvent company that may be available for sale to a purchaser company. Essentially, HMRC wants to ensure that the losses that are sold are attributable to liabilities which were borne by the company and not by its creditors. Hence, there is a raft of anti-avoidance provisions aimed at restricting the trading losses to comply with this objective. There may, however, be methods of mitigating this problem.
