My client is the sole shareholder of two small companies. One of these companies (Co A) owns a small apartment block and its income derives from renting out the apartments to third parties. The other company (Co B) owns the land on which the apartment block has been built and thus owns the freeholds of the apartments. Co B currently charges a peppercorn rent annually to Co A for the use of the freehold. Are these companies ‘Associated’ for corporation tax purposes? Co B has a live bank account into which tenants of Co A very occasionally deposit money. My client is keen not to close this bank account for administrative reasons. There is an intercompany loan (Co A owes Co B around £80K), which has been in place for many years.
10th Sep 2021
Is the freeholder company associated for CT?
How the definition of associated company fits with freeholder and leaseholder companies?
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