Two independent trading companies where one subcontracts work to the other wish to expand and move to larger premises. Suitable new premises include two buildings and a spare office block. Proposal to set up a Propco to make the acquisition of entire premises with Propco owned 50% by each trade co and property leased to each trade co.
Associated companies
If Propco is 50/50 including any loans to Propco then I assume that neither company can be said to control Propco on its own so none of the companies are associated with each other for small co rate purposes ?
CIHC
Will either trade co as a 50% shareholder in Propco be considered to be "connected" under s1122 CTA ( s839 ICTA) so as to result in letting to connected person(s) and result in Propco being a CIHC and full CT rate ?
s1122(4) CTA 2010 -" 2 or more persons acting together to secure or exercise control of a company are connected with - (a) one another ........."
Do you look through to the individuals (persons) as shareholders controlling trade co A and trade co B and deem them through being connected with their own trade co to be acting together through trade co A and trade co B to secure control over Propco and therefore Propco is a CIHC ?
Is the analysis any different than if Propco were simply owned 50/50 directly by the shareholders as individuals that own trade co A and tradeco B?
