TPP Your Q replied on March 25
Q
I have a customer who has a portfolio company that did not reflect who is a 100% shareholder of his other business. As the portfolio company cannot be negotiated, it does not have a bank account and it pays the costs associated with the maintenance of the company Holding, e, g. Declaration of confirmation or preparation of accounts directly from the subsidiary.
Is my question the subsidiary claim these costs in their accounts as eligible for corporate tax? Or are they dissolving for the subsidiary and the fact that the subsidiary pays for these things is rather a kind of intersocated loan between the two companies?
A
For the costs to be deductible in the subsidiary, they should be committed entirely and exclusively for the subsidiary trade. This is not the case here because these are expenses relating to the Holding company.
Expenditure should therefore either be prohibited if there is no probability of recovering them from Holding or treated as a loan between the two for which the subsidiary could expect a future reimbursement.
Q
If anyone wants to make a personal contribution to reduce their tax, should this be done before 6/4/25?
A
For the personal contribution of pensions to be processed as made in the tax year 24/25, payment must be made before 6/4/25. This would differentiate if the payment should be paid under direct debt before 4/4/25, but was not because the date dropped on Saturday, Sunday or a public holiday.
HMRC has useful advice here on payments made at the start and at the end of the taxation year. I specifically look at the “rules concerning the contributions to the members made at the start or at the end of a taxation year or a period of entry of retirement”: PTM041000
Q
A service company has ceased to trade and is ready to be closed. There are £ 12,000 in the company. Ordinary actions are held at 50:50 by husband and wife. The wife is a higher rate taxpayer, the husband has no 2024/25 income. Can the woman offer her ordinary shares to her husband, so a dividend can be paid only and who will be entirely covered by her personal allowance? Immediately after the payment of the dividend, a request for closing the company will be submitted.
A
As you know, a husband and a woman who live together will be able to make a lossless transfer for CGT – S58 TCGA 1992. As such, the dividend will only be imposed on him. It seems that they may not need two annual exemptions for CGT, so having all the actions of his name would not be a problem there. The income change arrangements do not seem to bite here either. This is a provision in value for the IHT, but it is also between spouses, there is therefore no problem – S98 IHTA 84. Your expected response is correct.
