Associated companies corp tax marginal relief

What are the irreducible controlling groups here?

Didn't find your answer?

I have a query about how to calculate irreducible controlling groups, for assets received on a winding up.

Mr. A and Mrs. A are married, and each own 50 shares out of a total 100 £1 ordinary shares (one vote per share, no casting vote) in company C; there are no other shareholders; and no unusual votes or other share classes; and no other reserves.

The balance sheet in the accounts, at 29/02/2024, year to 29/02/2024 is.

Bank account money in bank                                              250,000

Bank loan creditor                                                              (200,000)

Mr. A creditor loan account                                                (20,000)

Mrs. A creditor loan account                                              (10,000)

                                                                                         -----------

                                                                                            20,000

                                                                                         =======

Issued shares                                                                           100

Profit & loss account                                                          19,900

                                                                                            ---------

                                                                                           20,000

                                                                                           ======

CTM03941 says that irreducible controlling groups are calculated from votes, issued share capital or assets received on a winding up. CTM03943 says that the rights of loan creditors are ignored if it is not a close company or ordinary course of business, in winding up assets calculation. It does not mention other creditors eg trade.

  1. The bank loan and account above are different independent big banks. Who, on the basis of assets on a winding up is in an irreducible controlling group?
  2. How do normal trade creditors affect this?
  3. Do you disregard the banks before calculating?
  4. Would the calculation of assets received be different if the two banks are the same bank, even though the result may be the same?
  5. Would the calculation of assets received be different if the bank account was a physical asset instead, eg land and buildings, even though the result may be the same?
  6. CTM03940 says that companies are associated for the whole period, if they are associated for any part of the period. Does this mean that the above calculation has to be made for the balance sheet on each day of the year?
  7. What happens if the company is showing net creditors not net assets, ie P & L account is negative? What happens if there are preference creditors?

Replies (6)

Please login or register to join the discussion.

avatar
By Paul Crowley
12th Apr 2024 13:54

No idea what you are asking.
This looks like an AI generated question.

Thanks (2)
Replying to Paul Crowley:
avatar
By David Ex
12th Apr 2024 15:20

Paul Crowley wrote:

No idea what you are asking.
This looks like an AI generated question.

The OP hasn't engaged with replies to his recent questions so we may never know.

Thanks (1)
Replying to David Ex:
RLI
By lionofludesch
12th Apr 2024 15:49

David Ex wrote:

Paul Crowley wrote:

No idea what you are asking.
This looks like an AI generated question.

The OP hasn't engaged with replies to his recent questions so we may never know.

[chuckle]

Thanks (1)
RLI
By lionofludesch
12th Apr 2024 14:13

I vote Mr and Mrs A.

Thanks (1)
avatar
By Tax Dragon
12th Apr 2024 14:23

"CTM03943 says that the rights of loan creditors are ignored if it is not a close company or..."

And the "it" is...?

Thanks (1)
avatar
By Postingcomments
12th Apr 2024 14:43

Quite a few questions there. Are you after a fee quote for written advice?

Thanks (0)