We have just taken on a new client that had previously acted for themselves, occasionally taking the advice of a 'family friend' as these people often seem to do. They have a limited company and earlier this tax year set up a second, dormant company. They then transferred their shares in the old company to the new company (paper for paper) therefore creating a 'holding company'. The first company also owned a number of properties which have since been transferred to the new co for market rate with a dividend being voted to pay for them.
On the face of it I would agree that everything they have done so far is technically okay but, as yet, they have not obtained HMRC clearance for any of this. It is my understanding that clerance should be obtained for all such transactions, is this something I can now do after the event?
The client has also stated quite confidently that as the second company does not trade and merely holds property that it is not associated. However, i was under the impression that holding assets such as property would make it associated even if no rent were charged and therefore the CT bands would be halved.
Can anybody please clarify these points for me?
Thank you in advance to all who can assist - especially at such a busy time of the year.
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