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Setting up a holding company (property investment)

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Hi
I have set up a limited company in which I have incurred costs for dead property deals (SIC code 68100 &  68209). I understand I should have set up a holding company with subsidiaries being used to purchase assets within the subs (separated by investing and trading assets). I have not yet purchased any property. 

Is it possible to set up my current company as the holding company and have subsidiaries below this? Would I need to change the SIC code of the existing company?

Also, would I still get the tax benefits of having a single parent plus subsidiaries even though the current entity was not initially set out in this way?

Thank you for your help in advance. 

Replies (7)

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By David Ex
19th May 2022 16:08

RB8 wrote:

Also, would I still get the tax benefits of having a single parent plus subsidiaries even though the current entity was not initially set out in this way?

The best time to have taken professional advice is before you did anything; the next best time is now.

You’re asking for free professional advice which is usually an oxymoron - you can have free or you can have professional (done properly and of value). Are you getting free legal and surveying services for your property venture?

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Stepurhan
By stepurhan
19th May 2022 16:15

So you realise you made a mistake with your original setup. Rather than take this as an indication that you need paid-for professional advice before you make other mistakes, you are going to do a restructure based on free advice from random people on the internet?

This is a false economy. Given you have been able to join yourself, you know not every member here has accounting knowledge. You have also not given nearly enough information, so even advice from genuine accountants may not be suitable for your specific position.

Find a local accountant. Give them all the details of what you have done to date and answer the questions they pose about that and future plans. Only then will you get advice that fits your individual needs.

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By RB8
20th May 2022 06:21

Thank you for your responses and advice.

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By JCresswellTax
20th May 2022 10:22

I charge for this type of advice, you will be very lucky to find someone willing to give this type of (specialist) advice away for free.

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Melchett
By thestudyman
23rd May 2022 14:08

Who said you should have setup with subsidiaries? A group structure is almost certainly not going to be worth it.

Now is the timw to get an accountant - this sort of advice should have been gained before creating the company. They would be the best party to advise the benefits and pitfalls for a group.

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paddle steamer
By DJKL
23rd May 2022 14:29

The billion dollar (or pound) question; is this group proposing to borrow funds to acquire properties, if so who/what is taking security over the company assets, will this group structure , with all its additional operating costs, effectively, regarding legal costs re securities etc, increase your borrowing costs/reduce the number of lenders willing to deal with you?

There can be reasons to use group structures with property but you have to think very carefully, on a project by project basis, what ought to go where, and why the chosen place is appropriate.

For instance I know a decent size housebuilder who prefers to operate via myriad companies of which he and his wife are the shareholders of each, one company per project, but no group structure.

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Replying to DJKL:
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By RB8
07th Jun 2022 11:21

Hi DJKL

Thank you for your response. My mind had been racing and I thought I'd raise the question to gain more clarity - your response has certainly helped. I'll discuss with my Accountant what the best option is based on my circumstances.

Also thank you for your responses on other questions. They've been helpful!

Apologies for the late reply, a few personal unexpected events occurred.

Thanks All for your time.

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