Alan Rusbridger tells us it is all very complicated.
Which, of course, it is.
I do have to say that I am amused that there is no possibility of commenting upon the piece as yet.
However, here’s the question that we (or I) would really love to have an answer to.
Scroll forward nearly 80 years, and the Scott Trust is still going strong. It was reconstituted in 1948 and 2008, in order to carry on doing exactly the same as it’s always done. It is now a limited company, with five trustees owning the shares.
GMG has, over the years, made some shrewd decisions and investments, not least the purchase of Auto Trader – a magazine (and now highly successful website) for selling cars. Auto Trader has at various times been solely owned by GMG. At other times it has shared ownership with John Madejski, Hurst Publishing, BC Partners and Apax Partners. These changes in ownership have been done for assorted reasons: to maximize the income at a particular time, to build up the value of the company or to protect the group from having too many eggs in one basket. GMG’s portfolio today largely consists of its share of Trader Media Group (TMG) and Emap, which it purchased with the cash realised from the sale of 50% of TMG.
The low charge is on the exceptional part sale of the Auto Trader group. No complicated planning was needed to produce a low tax-charge: the government allows for tax to be deferred in this case if funds are reinvested.
The Guardian did reinvest the funds. That’s not artificial, offshore, or complex. Indeed, it is tax compliant: the company is doing what the government wants, and for which it provides a relief. So let’s stop the nonsense about low tax rates now: it’s just wrong.”
Now, the question is about the combination of these things. I’m not a tax expert (as everyone knows) so I really do not know the answer to this. But I would love to get one.
There’s a reorganisation from the Scott Trust to the Scott Trust Limited in 2008.
2008 is also when that 50% sale of Autotrader went through, leading to the £300 million profit which was not taxed: quite righteously not taxed because it was a subsidiary of Scott Trust Limited and the sale of a subsidiary of a limited company is not, under the SSE rules, subject to corporation tax (technically, a chargeable gain).
The question is: if the Scott Trust had not reorganised into the Scott Trust Limited, would some form of tax have been due on that £300 million?
That is, did the reorganisation alleviate some of the tax bill on that capital/chargeable gain?
Anyone actually know?