Connected under s993 ITA 2007?
I have a client and his (non-married/non-cp) life partner. He has a company with a six-figure sum sitting in the bank and he is planning the following:
1. Set up a UK Newco owned 50:50 with his life partner
2.lend the cash to Newco from his existing company
3. Newco will buy a residential property in another EU country which will be let as holiday accommodation mainly.
4. They may visit it for a few weeks a year for holidays.
For the purposes of the relief from BIK in ITEPA 2003 s100B the two companies must not be connected (unless a commercial rate of interest is charged)
I think they pass all the tests in ITA 2007 s993 except I'm not sure about s993(7). As they will be able to control the new company together this sub-section seems to deem them to be connected so that the companies become connected. This seems a bit absurd as it leads to the situation where virtually all companies are connected in this type of situation, regardless if the individuals are "connected" under s993 (1)-(6).
Or am I being stupid? If so please tell me why!!
- Recharge for private use of a company car 616 18
- Community awards 2014 - first category 225 8
- format cell to exclude decimals 349 18
- Payment plans for clients 299 4
- How a company director can keep paying £833 127 4
- Suggested tips to become a better accountant? 492 14
- Employee steeling client data 158 1
- Do most of you still use MS Office? 1,380 23
- Small bus. accounting software with departments 197 5
- Subsistence Exclusions 139 3
- Insurance Claims - Legal Services 95 1
- CT600 286 9
- VAT Office Grimsby 234 4
- signature required 926 34
- i want to get the reserves below 25K 220 1
- Can you help me spot errors? 353 4
- WHAT THE HECK IS GOING ON AT HMRC? 192 2
- Form VAT 600 FRS 97 1
- Dividend Waiver and Settlement Legislation 165 2
- Supply of service to EU community body exempt from VAT 112 1
- Auto enrolment excuses 1,314
- Feedback on accounts production software for IFRS 862
- Add T&Cs to Sales Order in Sage 562
- Credit where credit's due....... 344
- Buying goods in US and selling them to company in US 264
- TheTax Donut 240
- Double taxation relief - same income, different individual 196
- Semi retired FCA or equivalent 189
- Director's business mileage 160
- Sole trader CPD 150