I have a client who has a non-trading holding company who is a 100% shareholder of their other company. As the holding company is not trading, it doesn't have a bank account and they pay the costs associated with maintaining the holding company, e,g. confirmation statement or accounts preparation directly from the subsidiary.
My question is can the subsidiary claim these costs in their accounts as allowable for corporation tax? Or are these dis-allowable for the subsidiary and the fact the subsidiary pays for these things is rather some sort of intercompany loan between the two companies?
In order for the costs to be deductible in the subsidiary, they would need to be incurred wholly and exclusively for the subsidiary’s trade. This is not the case here as they are expenses relating to the holding company.
The expenses would therefore either need to be disallowed if there is no likelihood of recovering them from the holding company, or treated as a loan between the two which the subsidiary could expect future repayment for.
If someone wants to make a personal contribution to bring down their tax does it have to be done before 6/4/25?
For the personal pension contribution to be treated as made within the 24/25 tax year, the payment must be made prior to 6/4/25. This would differ if the payment was due to be paid under direct debt before 5/4/25 but wasn’t because the date fell on Saturday, Sunday, or a Bank holiday.
HMRC have some useful guidance here on payments made at the start and end of the tax year. I am specifically looking at ‘Rules regarding member contributions made at the start or end of a tax year or pension input period’: PTM041000
A service company has ceased to trade and is ready to be closed. There is £12,000 left in the company. The ordinary shares are owned 50:50 by husband and wife. Wife is a higher rate taxpayer, husband has no 2024/25 income. Can the wife gift her ordinary shares to her husband, so a dividend can be paid only to him and which will be fully covered by his personal allowance? Immediately after the dividend is paid, an application to close the company will be made.
As you will be aware, a husband and wife who are living together will be able to make a no gain no loss transfer for CGT – s58 TCGA 1992. As such the dividend to him will only be taxed on him. It appears that they might not need two annual exemptions for CGT so having all of the shares in his name would not be an issue there. The income shifting provisions do not appear to bite here either. It is a disposition in value for IHT but it is also between spouses so there is no issue - s98 IHTA 84. Your expected answer is correct.
