£600m Angel Trains tax hurdle may derail bids

£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.

Further reading:

European
influence: the EU fire fight

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource