Tax Question:

I have a holding company with 4 100% subsidiaries, all trading entities. The Holding company owns one property used in the trade of one of the subsidiaries. The holding company's activities therefore represent a dividend flow up and rent from the subsidiary for the use of the property.

The shares in the holding company is owned by individuals.

Is 100% BPR affected because of the property being held in the holding company and receiving rent?

Answer:

No it shouldn't be. There are restrictions to BPR where investment assets are held however the only grounds on which relief can be reduced for a group would be if the business of the holding and subsidiary companies viewed as a whole isn't wholly or mainly trading.

Therefore the activities, income sources and asset values of the parent and each of its subsidiaries must be examined to form a picture of the group business. Providing this is trading then relief should apply.

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