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26May94 UK: KYLE STEWART IN £2M ROW WITH ACCOUNTANT PANNELL KERR FORSTER.

By Mark Court.Kyle Stewart has issued a £2 million writ against the accountant it used when it was bought by the Netherlands-based Hollandsche Beton Groep.The writ accuses chartered accountant Pannell Kerr Forster of negligence in the transfer of assets during a company reorganisation as a result of the buyout.Kyle Stewart claims this resulted in it having to pay a far larger tax bill than it should have done.The complicated legal action centres on the Airlinks Industrial Estate, which Kyle Stewart owned and developed.The writ claims that, at the time of the company reorganisation, Airlinks was valued at £3.7 million which represented a capital gain over the accounting year to the end of 1989.Kyle Stewart claims it intended to balance this gain against a capital loss when it transferred the goodwill of its building and civil engineering businesses to a new company, Kyle Stewart Holdings.But the writ alleges that Pannell Kerr Forster failed to do this.As a result, Kyle Stewart is claiming £1.32 million from the accountants for corporation tax due to the Inland Revenue.The writ also states that Airlinks was sold in November 1989 for £3 million at a loss of almost £700,000.For this Kyle Stewart is claiming £47,000 because the accountant defined the loss as a trading rather than a capital loss.The effect was for the contractor to return a trading profit, which Kyle Stewart claims gave a tax liability that could have been avoided if a claim for group relief had been made.Bob Hickson, deputy managing director of Kyle Stewart, said: 'The writ has been issued in connection with alleged negligences by a previous firm of accountants.'These arise from the tax implications of a historical group reorganisation following the acquisition by Hollandsche Beton Groep.'John Hills, a partner at Pannell Kerr Forster, said: 'I have not seen the writ but that doesn't necessarily mean it hasn't been served.' CONSTRUCTION NEWS