Associated Companies for CT - multiple interests

Are you relying on clients to tell you all their shareholdings?

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I have a few wealthy clients where they have numerous business interests in companies where they have shareholdings but may not be directors. A couple of these clients I don't prepare their personal tax returns so i've never had to make detailed enquiries.

With the new corporation tax associated companies rules -  how are other accountants finding out this information? Obviously I would ask my client in the first instance, but I am very much dependent upon them giving me the correct information and relying upon that. They may well forget about changes in shareholdings mid-year or other variables too, not to mention businesses their their wife may have an interest in (with interdependence), or even companies that they share the same business partners with etc. Whilst I can search Companies House for directorships, you can't do the same with shareholdings, and it becomes even more difficult with worldwide companies (my clients typically may have interests in India, Dubai, European countries etc, none of which I've needed to know about before and I have limited access to those records). 

Just trying to find the most practical way of getting this as accurate as possible.

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By David Ex
19th Apr 2024 22:07

Sheepy306 wrote:

Just trying to find the most practical way of getting this as accurate as possible.

I guess all you can do is tell the client what you need and why and make it very clear that the accuracy of the CT returns relies on full disclosure. They need to understand that it’s information only they can warrant. I’m not sure there’s much else you can reasonably do. Maybe put a note of assumptions made when you send the return for approval.

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By FactChecker
19th Apr 2024 23:27

Just a thought (maybe more one for David Winch) ... if these individuals are clients for whom you don't prepare their personal tax returns, then presumably it is one or more of 'their' companies who are your client?
In which case, if they are a PSC in that company ... how do you manage your AML checks if you don't know the source (as in shareholdings of other companies) of their wealth?

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RLI
By lionofludesch
20th Apr 2024 07:52

You may as well ask whether you're relying on clients to disclose all their bank accounts or employments.

Of course you are.

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