TaxZone Guide: Accounting for interest from associate companies
The question of whether a parent company in receipt of interest is carrying on a business and so to be counted as an associate came up again in Any Answers last week like a bad penny.
"Carrying on a business" is a much wider concept than carrying on a trade. The productive management of investments, for instance can amount to a business, whilst it will not amount to trading. As we are talking tax, each case must decided by looking at the facts.