Any Answers Answered: Transition profits and CIHC

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Which box to put transition profits adjustment?

The first question comes from Claudia Lowe, who writes, “Do you put the transition profit in box 68? On my software (BTC), it is the only box that will adjust box 73 to the correct figure.” 

However, HMRC notes state: “Box 68 If your basis period is not the same as your accounting period. You may have to add together the amounts of your accounting periods or apportion the total to work out your profit or loss for your basis period. Put any adjustments to your profit (box 64) or loss (box 65) in box 68. Do not include any transition profit or loss in this box.”

So what boxes should we be filling in as far as transitional adjustments are concerned? 

CIHC and associated companies

The second question comes from PJN, who asks a ‘double whammy’ question on close investment holding companies (CIHC) and associates. 

“We have a client who is the 100% shareholder of 2 companies (A Ltd and B Ltd). A Ltd is a trading company with a profitable trade. B Ltd owns a property which it rents on a commercial basis to A Ltd.”

The question they are really asking is, we have two associated companies so we’re dividing bands but a close investment holding company still pays at the main rate so is it two pieces of bad news?

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