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TEAP007
TEAP007, Tax Preparer
Category: UK Tax
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Experience:  Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years
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Trading Company share capital 100% owned by Holding Company. Additionally

Resolved Question:

Trading Company share capital 100% owned by Holding Company.

Additionally Holding Company to own property and equipment used by Trading Company.

If Holding Company charges Rent and Hire to Trading Company, claims capital allowances, accounts for its own corporation tax, etc would it still remain exempt from Associated Company rules ?
Submitted: 1 year ago.
Category: UK Tax
Expert:  TEAP007 replied 1 year ago.

TEAP007 :

Hi there

TEAP007 :

Looks like you are offline

TEAP007 :

However please say why you think that the company would be ignored for Associated company purposes

TEAP007 :

Quite clearly the holding company is doing more than MERELY receiving dividends from the subsidiary and distributing them BUT will be actively carrying out a trading/business function - again clearly within the ambit of UK corporation tax if UK resident

TEAP007 :

So I am sorry to disappoint you but the Holding Company will quite clearly be an Associate of its subsidiary and vice versa

TEAP007 :

I hope that this helps you and basically UNLESS a company is not carrying on a business - whether UK resident or not - and is merely receiving and distributing dividends from the subsidiary it is going to be reckonable as an associated company. Of course if they are a group the potential damage of the associated company rules might be mitigated by group relief if both are UK liable to CT companies.

TEAP007 :

I hope that you are satisfied with the answer and that you will be able to rate the JA service as good or better but if there are any doubts please do not hesitate to come back to me as the question has now been converted to Q&A

TEAP007, Tax Preparer
Category: UK Tax
Satisfied Customers: 760
Experience: Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years
TEAP007 and other UK Tax Specialists are ready to help you
Customer: replied 1 year ago.

Thank you for your advice, it is as I expected but thought perhaps I was missing something.


Usual story of client meeting Joe Bloggs in the pub and coming back with


sparse information, as you suggest may be a group situation.


 


Much obliged


 


Alan


 


 

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