I'm looking at this in relation to CT relief for the Trading Company on donations made to the Charity.
The Trading Company is a Company Limited by Guarantee, its directors are also the members and those directors are also the directors and trustees of the Charity.
The question, with which I am struggling, is, "does the above structure mean that the Trading Company is owned by the Charity and thus do donations made by Trading to Charity within 9 months of Trading's period end qualify for CT relief?"
If not, is there a way that the Charity can own the Trading Company, bearing in mind it's structure as CLG?
Replies (5)
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The scenario you have described is one of common control, not of the company being owned by the charity.
Companies limited by guarantee are usually not-for-profit entities. Whilst a trading company can be not-for-profit, the mention of donating profits suggest otherwise.
The great thing about the law (when it imposes tests such as "wholly owned"), is that it normally defines the terms used in the tests.
In this case, the definition is in s200 CTA 2010.
You amend the articles to ensure the charity is beneficially entitled. Include a winding up paragraph such as:
"In the event that the company is wound up the members declare and agree that [charity], being a registered charity having the charity number [XXXXXXXX], will be beneficially entitled to the Company's assets as shall exist at that time notwithstanding that they may or may not be a member of the Company at that time."