£600m Angel Trains tax hurdle may derail bids
Suitors for the rolling stock leasing company could find their advances seriously affected by a tax millstone
Bidders for a rolling stock leasing company may be liable for a £600m tax
charge if they fall foul of a key anti-avoidance scheme.
Angel
Trains, owned by the Royal Bank of Scotland has been put up for sale, but
may be scuppered by Schedule 10 of the Finance Act 2006, which guards against
companies buying leasing businesses as a tax avoidance measure.
After being allowed capital allowances for tax purposes against their
investment in new trains when rolling stock companies were privatised, RBS may
be lumbered with a £600m tax toll on selling Angel.
The burden would be passed on to the winning bidder. The company may then
seek to offset the tax losses against profits in other parts of their business,
but this could fall foul of Schedule 10.
Angel makes profits of about £100m a year, and the difference between the
written-down tax values of the assets and how much they fetch in the sale could
leave RBS with the £600m tax bill, the Sunday Telegraph reported.
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