Small profits rate for co with shares & property?

Close company holds residential property and share portfolio, will small profits rate apply?

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Family company (under control by 5 or fewer shareholders) holds residential rental property and an investment portfolio of shares, OEICs and bonds.  Property is let to unconnected persons on a commercial basis.    Have looked at HMRC manuals CTM60730 for definition of wholly or mainly for property investment permitted purposes to get out of CIHC, and value of property in balance sheet is roughly 2/3rds with investment portfolio roughly 1/3rd.  Income is roughly the same split. Will the small profits rate apply to this company?  

Thanks for any useful comments in advance.

Replies (11)

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By Ruddles
26th Mar 2024 16:40

It is up to you to interpret HMRC's guidance in light of all relevant facts and circumstances (the guidance refers to factors that are not mentioned in your question). So I for one will not be interpreting it on your behalf.

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By Branski
27th Mar 2024 09:58

Why bother posting if you are not offering help, is that not the point of this forum?! Nice dog picture though!

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By More unearned luck
28th Mar 2024 19:17

Ruddles has pointed out that you have asked a question without supplying the facts needed to give an answer. Perhaps it would have helped potential respondents and thus yourself if you had taken the hint and supplied the missing data. As things stand any substantive answer would be a case of GIGO.

There is no shortcut to carrying out the same multifactorial assessment that the manual instructs HMRC officers to undertake. It seems a cheek to fob that task onto Aweb members when you are stingy with the facts and doubly so in expecting the assessment to be done for free, to say nothing of your bad grace.

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By Branski
28th Mar 2024 20:07

Another unhelpful comment!

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By More unearned luck
02nd Apr 2024 20:08

Why was it unhelpful?

Your question was "Will the small profits rate apply to this company?" Since answering that question involves a time consuming assessment of facts why would anyone give you a considered 'yes' or 'no' response for free, despite your very nice manner? Any such answer would be unreliable as you haven't supplied all the facts and wouldn't, in any event, be reliable owing to the nature of anonymous posts on internet forums. See the fun being had at Pistonhead's expense.

Doing your own assessment is unavoidable unless you subcontract the work to another accountant/tax adviser. Ideally one experienced in this area.

So, in what way could a response to your question be more helpful than Ruddles and mine were?

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By More unearned luck
27th Mar 2024 12:48

BTW 2023/24 is a revaluation year for ATED.

(Sorry for posting a response that might be entirely unhelpful).

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By Branski
27th Mar 2024 17:32

Each property in company < £500k value for ATED, any thoughts on CIHC question?

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Replying to Branski:
Stepurhan
By stepurhan
27th Mar 2024 23:12

I have a thought on the CIHC question. It is that you should seek paid-for bespoke advice rather than winging it. Even with sub-£500k property values for each individual property, there is presumably enough at stake here that relying on incorrect advice could be very costly.

If you have a paid-for adviser, and they make a mistake that is costly, they will usually have insurance to cover you. If you make a mistake that is costly based on what someone tells you here (because the respondent has no knowledge, or made assumptions about missing information, or you misunderstood their response...) then you have no recourse.

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By Branski
28th Mar 2024 15:08

I remember when this forum used to be a helpful sounding board for fellow tax advisers, how times have changed. A technical discussion with fellow ATII members at the next quarterly update should suffice however.

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By Leywood
28th Mar 2024 17:05

Branski wrote:

I remember when this forum used to be a helpful sounding board for fellow tax advisers, how times have changed.

Problem is these days, its the same very small group of people answering all of the questions.

When, since 2019, did you provide some helpful assistance to someone on this site? Its a two way street surely.

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By Branski
28th Mar 2024 18:29

Fair enough, point taken.

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