Can it be this easy?
My client is a 50:50 shareholder in a building company (A) in which he has a large credit balance upon his director’s loan account; so in effect he ‘controls’ that company which is associated with a small property development company (B) which he owns 50:50 with his wife.
Here’s my plan: extend the year end of company (A) from 31st March 2011 to 1st April 2011 so as to take advantage of the relaxation in the associated companies rules which applies to accounting periods ending on 1st April 2011 onwards. Furthermore, no extra accountancy work to do as accounts may be drawn up 7 days either side of the accounting period. Leave company (B)'s accounting period as 30th September.
The new rules for associated companies state:
- If there is no commercial interdependence between the companies (which there isn’t), then proceed to step 2
- Step 2 says to consider ‘direct control’ of which there is none; ‘direct control’ means before attributing the rights of any associates. So I may ignore husband & wife in company (B)
- So as no commercial interdependence and as no ‘direct control’ ………….then under the new rules ……..neither company is associated.
Hey presto! I’ve saved a sizeable chunk of tax for my client or am I missing something? Readers’ views would be appreciated.
- What password safe app does anyone recommend? 847 21
- RTI and bank holiday Friday 43 2
- Laptop purchase 810 16
- Company petition 23 1
- Belated VAT Exception Application 177 6
- Do you design it or pick what's out there? 532 13
- CT600 for the first time 111 5
- CGT and PPR and Lettings Relief? 313 7
- Agent with HMRC 153 9
- Propert purchase, renovation then rented out and VAT 46 1
- Purchase buy-to-let property personally or LTD? 548 9
- Sage Payroll 98 4
- VAT query 142 2
- Elective DeductionsModel 101 2
- company secretarial software 201 4
- How best to own a 4-way property partnership 258 5
- Value pricing 387 13
- Weely paid employees 101 1
- Tax repayment for 2013-14 294 6
- Should design costs be capitalised? 85 1
- Residential Property Purchase Above £750K 739
- Using Sage with Sofa Categories 508
- Does anyone have an unwanted ICAEW wooden plaque? 368
- One man Company and closing payroll scheme as none paid 350
- Goods shipped inter EU and VAT Reporting 268
- VAT on Gaming Machines 221
- Sage 200 and Access Dimensions reviews 204
- Non-Resident Director - UK Tax Position? 194
- transferring simply accounting 2010 from xp to windows 7 184
- Director Loan account operation 165