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bigduckontax
bigduckontax, Accountant
Category: Tax
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Hi - I have a quick question. I am looking the following structure

Customer Question

Hi - I have a quick question.
I am looking the following structure (All limited companies)
Company (A) has two shareholders
Company (B) is owned by Company (A)
Company (C) is also owned by Company (A)
Instead of registering the individual shareholders for each company, I create like a holding where Company (A) only invests capital in (B) and (C) and receives dividends. Is there any tax implication in doing so? Is it easier to let go of company (A)?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith, amongst other things a Chartered Secretary, and happy to help you with your question.
Frankly, I do not see your problem with the current situation. Companies B and C have only one shareholder, Company A. Thus the registration of B and C is a simple matter and once done need never be altered. Makes the Annual Return dead easy!
Company A will, of course, have the two shareholders registered, but if there is no change year on year, again the Annual Return is again simplicity itself.
Assuming you wish to get rid of any company the quick was to do it is to sell one or more on eBay for example. There are always a few available for purchase there. Just advertise and sell, the passing of the share certificates to the new owners in exchange for the purchase consideration will complete the matter and absolve you from any further involvement.
I do hope I have been able to simplify matters for you and shown you a new way forward.
Customer: replied 2 years ago.

Hi Keith,

Many thanks for your answer! I understand the structure makes thing simpler (reason why I am doing it) but from a tax implication there is no difference? Cause under this structure Company (A) will not be paying tax since its only income is dividend received from Company (B) and (C) which are taxed.

Also, you can sell companies and shares on eBay?

Thanks
Georges

Expert:  bigduckontax replied 2 years ago.
Sorry Georges, I overlooked that bit. Inter company dividends pass free of all tax as they are classed as franked investment income under the Corporation Tax (CT) regime. They are thus effectively beyond the scope of UK taxation.
You can certainly sell companies on eBay, I have often seen them advertised. If you sell a company the only way to do that is to sell the shares in that organisation. Shares outside that envelope are quite another matter and their sale is, I submit, inappropriate to the eBay market place.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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