Transfer of Profits to another company

Transfer of Profits

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Hello

I need to transfer the profits from one company to another company within the same group.  How do I show this transfer in the corporation tax return?

Thanks

 

 

Replies (10)

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By Ruddles
19th Jan 2017 21:48

Ask the group's accountant.

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By gedmond72
19th Jan 2017 21:52

Thanks ruddles but that's not possible. He's on holiday.

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Replying to gedmond72:
paddle steamer
By DJKL
19th Jan 2017 22:09

Well, in that case I would wait for his return.

If the position is just re an immediate very urgent cashflow issue the directors could possibly meantime agree to say lend funds from one company to another (they are both companies? LLPs and partnerships re loans can have real dangers) ,but that should be last resort as doing any transactions without considering the implications is really not advisable.

Possibly better is call him and interrupt his holiday

You do not say the group relationship, (Sub to parent, parent to Sub, one sub to another sub) you have given no details of the reason for doing anything and nobody on here has a clue re vat implications/other taxes within your group, so really giving meaningful advice is impossible and possibly disrespectful to the incumbent.

What is your position vis a vis the "Group"?

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paddle steamer
By DJKL
19th Jan 2017 22:13

As an aside and considering your mention of CT600 (CT return),are you more talking about Group Relief re losses rather than a "transfer of profits"?

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By Ruddles
19th Jan 2017 22:18

If the transaction hasn't yet happened, and the question is simply how it should (or should not) be reflected in the CT return, I can see no reason why it can't wait.

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By gedmond72
19th Jan 2017 22:27

The transaction happened in April 2016 & the company has entered liquidation. The company that has accepted the transfer of profits is a sub company to the now liquidated company in the group. The vat & tax implications have being looked into by their team. I've being asked to plug in the figures into my tax software but just not sure of which boxes to use.

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Replying to gedmond72:
paddle steamer
By DJKL
19th Jan 2017 22:42

Well, what mechanism happened? Dividend, cross invoice between entities, what were the mechanics of the transaction?

The tax treatment will depend upon what actually occurred, the phrase "transferred profits" really does not in itself mean anything.

Edit- as a starting point the transaction surely is reflected within the accounts, the CT600 is then derived/prepared from the accounts.

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Replying to gedmond72:
By Tim Vane
19th Jan 2017 23:24

gedmond72 wrote:
I've being asked to plug in the figures into my tax software but just not sure of which boxes to use.

Monkey, Typewriter;
Typewriter, Monkey.

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Replying to Tim Vane:
paddle steamer
By DJKL
19th Jan 2017 23:43

Hamlet

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By Ruddles
19th Jan 2017 22:49

I do wish people would be more careful when asking questions. What you really meant to say was that you need to reflect the transfer of profits (whatever that means).

As DJKL says, you've been far too vague.

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