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Company owning 5% of share capital in associate

Trading company?

If a company owns 5% shares in another company (the trading company) and charges it management charges/consultancy and receives dividends in respect of the 5% holding, could it still be classed as a trading company on the basis of the management charges/consultancy being a trade. The answer to this will have an impact on an BPR claim or ER. I appreciate that it wont be a holding comapny of a trading group.

Please assume that no surplus assets are held in the topco.


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20th Sep 2017 13:28

Is it carrying on a trading activity? Yes. Does it carry on activities other than trading activities to a substantial extent? Who knows.

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