Holding companies ― setting up a management services arrangement

Produced by Tolley
Holding companies ― setting up a management services arrangement

The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Holding companies ― setting up a management services arrangement
  • Practical points ― management services arrangements

IP COMPLETION DAY: 11pm (GMT) on 31 December 2020 marked the end of the Brexit transition / implementation period entered into following the UK’s withdrawal from the EU. At this point in time, key transitional arrangements came to an end and significant changes began to take effect across the UK’s VAT and customs regime. This document contains guidance on subjects potentially impacted by these changes. Before continuing your research, see the Brexit — overview guidance note.

This guidance note looks at some practical points that a holding company should consider when setting up a management services arrangement.

When shares are acquired in a subsidiary (or subsidiaries), it is common for a holding company to be set up as an acquisition vehicle. Often this acquisition vehicle will decide to provide taxable management services to the subsidiary (or subsidiaries) in order to try to secure VAT recovery on the acquisition costs (such as professional fees).

For an overview of VAT and holding companies generally, see the

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