In this week’s Q&A, Croner-i tax advice consultant Ray Bradbury, explains the tax liability when dealing with associated companies when corporation tax rises in April
How will the newly reintroduced ‘associated company’ rules apply from 1 April 2023 in the context of the small companies’ rate of corporation tax for two companies in the following scenario?
My client and his wife own two separate trading companies as follows:
Company A: the shares are owned 75% by husband, 25% by wife. The company’s only activity is a trade of providing engineering technical and consultancy services. The business is conducted solely by the husband as its only director-employee.
Company B: the shares in this company are owned 80% by wife, and 20% by husband. The company’s only trade is the provision of educational training, and this is carried out solely by the wife as the only director-employee.
