Case Study: Supaflors Limited

Overview

Supaflors Limited was part of a two-company trading group in the floor covering sector. A B Carpets owned 100% of Supaflors Limited, and both companies held freehold commercial properties used in their respective trades.

The father and son owner-directors wanted to sell the larger property held within the group while keeping the capital gains tax exposure as efficient as possible.

The Challenge

The key issue was how to structure the property disposal without creating unnecessary tax leakage. The advice needed to balance capital gains mitigation with the need to preserve the trading status of the companies and maintain commercial flexibility for the family owners.

Our Approach

We created the most tax-efficient structure based on the group relationship between A B Carpets and Supaflors Limited. As A B Carpets owned 100% of Supaflors Limited, the companies formed a capital gains group, enabling us to design an intra-group planning route that could operate on a no gain/no loss basis before any third-party sale.

The structure was designed to place the property in the most appropriate company before disposal and to compare the outcome with a direct property sale. Degrouping risks, SDLT and the commercial purpose of the arrangement and obtaining the necessary HMRC clearances were considered as part of the implementation.

Outcome

The directors were able to implement a tax-efficient route for disposing of the larger property while keeping the transaction commercially robust. The planning achieved significant tax savings by ensuring the structure was considered and implemented before sale negotiations were finalised.

By involving experienced tax advisers at the outset, the family owners were able to make full use of the flexibility available within their 100% group structure and reduce the risk of unnecessary tax leakage on the property disposal.

Key Takeaways

This case shows how early, specialist tax planning can help business owners achieve tax savings, structure a property disposal efficiently, protect commercial objectives, and avoid unnecessary tax costs.

• Early planning creates more options before a sale process begins.
• A 100% group structure can provide valuable flexibility for capital gains planning.
• Tax efficiency must be balanced with commercial purpose and implementation risk.
• Using experienced tax advisers can help reduce unnecessary tax leakage and support a robust transaction structure.

“We have been working with DSK for over 10 years and have built a strong and trusted relationship over that time. Their team has consistently provided professional, reliable, and approachable support across all aspects of our accounting needs. Most recently, they played a key role in the restructure of our companies, Supaflors Ltd and AB Carpets Ltd. The entire process was handled smoothly and efficiently, with clear communication throughout. They kept us fully informed at every stage, ensuring we understood our options and felt confident in the decisions being made. The end result was exactly what we had hoped for. DSK are always hands-on and readily available to assist with any accounting queries or issues, no matter how big or small. Their proactive approach and commitment to client service make them a valued partner to our business, and we would not hesitate to recommend them.”

Joel Bushaway, Supaflor