Member Info for D-Geeman

These are for children but the sleep away isn't very much more expensive, and is for grown ups too
https://www.gltc.co.uk/collections/spare-beds-sleeping-bags/products/bed-in-a-bag-navy-stardust

'I’ve missed the answer to this one….. is there any way to view the AMG?'

Ripley. You're often quite rude to posters I like to read but let bygones be bygones.. How about this https://www.mbusa.com/en/amg

Yes Bluebelly, and +158.88% this evening! That would normally create a frenzy. We live in hope.

It's a minor detail but under CC, if they made a profit, I think they'd invest in new products and marketing. If HMRC rules allowed CC's 'trajectory' for the company to be permissible then that would allow for a few new products each year, at least. They've gone from one mattress to 6 or 7; to bed frames and gifts. It's quite a growth in the range really.

Thanks very much for your post Bermondsey.

My earlier (tax) post ignores the 75% rule so can't be right. When is a takeover 'a takeover' and not just 'buying shares'?

I try to check with Argos each day dontgive and they sold 4 in the previous 24 hrs. Roughly 4 day, most days. Nice little earner.
I have to say that argos hardly seem to sell any big mattresses for several days, then a few.

Great if they are selling them in France. Maybe (middle aged!) people are taking them glamping, and to festivals as you mentioned.

On a keyboard now. .

Only talking (hopefully!) common sense here but aren't the rules to stop someone with nothing in common with eve buying the company (on the open market or otherwise) just so that they can put the previous eve loss against their main company's profits? So the likes of google can't buy eve to get the £60m tax loss avoid tax as they are not really mattress makers?

But anyone – even google – could buy a lot of eve shares, 100%, run it as a sleep wellness business selling mattresses, beds and CBD, and still take full advantage of the tax loss *against future profits of eve sleep LTD* within the google group. If they expand the range, fine, just keep eve sleep Ltd independently accounted for within the group.

If I had, or could borrow, £3m/ £5m / £7m, I could do that. If I were google and had spare £3m/ £5m / £7m and bought 100% of the shares I'd just have to have eve separate within google. The tax loss travels with the shares; the losses stay within the eve accounts.

What the rules don't allow is for eve to be bought out of administration and have the same tax losses come with the assets. That makes sense as the new owner is not buying eve shares.

So if DFS, or Emma, bought the shares at an agreed price through the FSP they could then run eve from their existing DFS / Emma HQ office (get rid of the Camden office and Camden staff, CC, TP the BOD etc) , and run eve with their DFS / Emma people (cut costs) and get economies of scale from suppliers (bigger orders for foam etc) as long as there are two invoices; one for eve goodies and one for existing Emma / DFS goodies. The eve sleep LTD company might now be profitable and customers would hardly notice.

In the future, if this new owner ( DFS in this example) then want to bring out a 'Hybrid plus+plus' mattress at £10,000 (John Lewis seem to have an £11000 mattress!) they might label it as 'eve' and put the production costs and materials on an eve invoice so to take advantage of the previous eve losses.

Putting it on a DFS label would lose the tax advantage as not an eve; nothing to do with eve.

(Enough rambling)

‘Problem is D-G I believe part of the FSP is that no entity taking part is permitted to but EVE shares during the FSP process —- it is stated within the rules’

I took this as an undertaking not to buy during the FSP until a price is negotiated, then buy a huge block / controlling stake at the agreed price: so still buying shares, just not in dribs and drabs and affecting the market. If two bidders bought in dribs and drabs then you could have DFS with 10% and Emma with 10% which would cause complications down the line. Not least the price shooting up and then the 10% costing a lot more than it otherwise would do so. In fact it protects any buyer from paying too much and so (hopefully) making them more likely to buy than stay clear (which is what they have already done)

(On my mobile and not so easy to write a coherent post!)

But if a buyer now buys the shares up (close to 100%) then the tax loss travels with the shares? Like at the moment with me, you, DGU, we all get to take advantage of tax losses made years ago at the moment eve shows a profit?

CC said that she worked with more freedom on her brands such as Marmite as the parent in fact wanted to sell them on.

I know this is looking rather far into the future, and with my optimistic hat on, but DFS, Nectar, could build eve sleep Ltd into a profitable branch if they wished and then sell it on, continue to stock the eve brand too. I doubt that's likely; just to illustrate the point.

Hi Bermondsey, yes, fully understood. But eve might benefit from economies of scale (from being part of a bigger group) and the office could go, and 'eve sleep' could be profitable. In fact no one would buy eve if it wasn't going to be profitable for them. But tax free profits on a acquisition might be quite attractive.

The but I don't get is eve (within a bigger group) becomes profitable. There's no tax on those profits. What happens to the profits to not pay tax at group level? Do they have to be reinvested purely into the eve branch?

of course eve would have to be a profitable part of the parent company before the tax losses (against profit and future profit) kick-in.

With economies of scale and cost cuts maybe it would work.

2 l's
https://www.linkedin.com/in/john-baillie-a0721853/?originalSubdomain=uk

Clarification: .. but would not extend to the wider group... Simba, Nectar or whoever, on profits on their Simba sales, Nectar sales, if they bought it.

It would just cover future eve profits (and might not be possible out of admin even for eve).

I think the tax loss does carry on with the trade 'eve' (under a new owner) but would not extend to... Simba, Nectar or whoever, if they bought it.

So my question is would it even carry over for eve's trade to a new owner if bought out of admin.

So better to buy before than after. Anyway, it's not a simple answer reading what I've looked at this morning. It seems that HMRC see it as an area for potential tax avoidance and there are lots of caveats.

We were talking about this the other day. Just pursuing it a little. I don't claim to understand which parts, if any, are relevant. Others here might know more.

'Tax issues in insolvency
procedures
ASH, RGS, KZK & TWR JULY 2020'

https://www.traverssmith.com/media/7162/insolvency-slides-part-2-4148-5169-7701-v2.pdf

P 51 has this part:

Anti-Avoidance
• Chapter 1, Part 22, CTA 2010 sets out criteria for losses to be transferred and remain available as if there had been no change in the ownership of a trade, namely:
• there is a transfer of a trade
• 75% interest in the transferred trade belongs to the same persons at any time during the one year before the transfer, and at any time during the two years after the transfer.
• both companies are within the charge to corporation tax or income tax in respect of the transferred trade (general position).
• Chapter 2, Part 14, CTA 2010 provides that the transferee of trade cannot carry forward trading losses from an accounting period beginning before the change in ownership to an accounting period ending after the change in ownership if:
• there is a major change in the nature or conduct of the company’s trade (within certain specified time-periods); or
• If there is a change in the ownership of the loss making company at any time after its trading activities have become “small or negligible” and before they revive.
• Chapters 2A to 2E of Part 14 of CTA 2010introduced additional anti-avoidance rules to prevent loss-buying relating to changes in nature or ownership of trade etc.
• Certain Targeted Anti-Avoidance Rules may also be of application in certain loss-buying situations.

Sleep Away back in near me, now with 20% off.
Eve Sleep Away Single Mattress 964/6472
£143.00

In the interest of not getting drawn into pointless conversations with people who don't post in good faith (so what's the point of communicating with them anyway) I have learned how to use filters for the first time, and also won't routinely follow telegram any more.

It's a shame but my time is definitely more valuable...

Talk with the rest of you tomorrow of course.

'Loose' not 'lose' of course