Holding companies ― overview

Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance

Holding companies ― overview

Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
imgtext

VAT for holding companies is a complex and highly litigated area, particularly when it comes to the entitlement of holding companies to recover the VAT that they incur on costs. HMRC’s policy has developed over time but it still often takes an aggressive approach in denying holding companies VAT recovery on costs. Holding companies should exercise extreme caution when it comes to their VAT affairs and they should plan carefully and early (particularly in relation to acquisitions and disposals of shareholdings).

This guidance note provides an overview of some of the key VAT considerations for holding companies, specifically:

  1. what is a holding company?

  2. when can a holding company recover VAT on costs?

  3. the effect of VAT grouping for holding companies

What is a holding company?

HMRC suggests that in simple terms, a holding company is a company that acquires and holds shares in one or more subsidiary companies. In reality, a range of different types of businesses may be referred to as ‘holding companies’. Some holding companies may be entirely ‘passive’

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
Powered by Tolley+

Popular Articles

Transfer of assets to beneficiaries ― legal, administration and tax issues

Transfer of assets to beneficiaries ― legal, administration and tax issuesThis guidance note outlines how assets are transferred to beneficiaries and the tax consequences that flow from the transfer. Whether a payment is income or capital is discussed in the Payments to trust beneficiaries guidance

14 Jul 2020 13:52 | Produced by Tolley Read more Read more

Taxation of loan relationships

Taxation of loan relationshipsThe vast majority of companies will have loan relationships and so will need to consider how they are taxed under the loan relationship rules. There are also specific provisions dealing with relevant non-lending relationships and other deemed loan relationships.

14 Jul 2020 13:48 | Produced by Tolley Read more Read more

Withholding tax

Withholding taxIntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeUK withholding tax may be reduced under the provisions of a double tax treaty (DTT). Prior to 1 June 2021, payments of interest and royalties made to EU resident associated companies were

14 Jul 2020 14:01 | Produced by Tolley Read more Read more