»Ê¹ÚÌåÓýapp

General

»Ê¹ÚÌåÓýapp parent, or holding, companies of groups can, for the most part, be divided into three broad categories:

• those which carry on the mainstream trading activities of their group,
• those whose income consists only of dividends, interest and rents from their subsidiaries, and
• those whose income also includes management charges paid by their subsidiaries.

»Ê¹ÚÌåÓýappre is also, however, a small fourth category of so-called ‘hybridâ€� companies which have trades other than just the provision of management services running alongside the management functions. »Ê¹ÚÌåÓýappse companies were not likely to qualify as investment companies up to 31 March 2004 because of the extent of their trading activities.

Periods from 1 April 2004

For accounting periods beginning on or after 1 April 2004 it is likely that all but the pure trading company would be ‘companies with investment business� and eligible to claim relief for management expenses.

However whether or not a company has a business at all will still be an issue. »Ê¹ÚÌåÓýappre is guidance at CTM08180 on expenditure by an investment company that relates to the business or trades of other companies in the group.

»Ê¹ÚÌåÓýappre is guidance at CTM08180 and CTM08260 where a holding company incurs expenses in connection with a take-over bid and at CTM08200 where a holding company incurs bid defence costs.