CTM08180 - Corporation Tax: management expenses: groups
For guidance on expenses incurred by grouped or associated
trading companies to which Case I rules apply, see BIM42140.
ICTA88/S74 has no direct relevance to management expenses
under ICTA88/S75 but a holding company has no special
position in relation to Section 75 because it happens to be part of
a group. It is a member of a group because of the degree of its
investments in other companies and the other companies remain
separate legal entities. The allowable expenses under Section 75
must still be the expenses of managing the holding company's
investments, and not the businesses or trades of the subsidiary
companies.
You may have a case of a holding company where there is some
intermingling of the management of the business of the holding
company and the businesses of the subsidiary companies. In such a
case, in practice, you need not disallow expenses:
- if the expenses would have been allowable for UK tax purposes if incurred by the subsidiary,
and
- if the holding company arranges to charge out future expenses to the subsidiary.
