CTM08180 | Corporation Tax: management expenses: groups

For guidance on expenses incurred by grouped or associated trading companies to which trading income rules apply, see BIM42140.

CTA09/S54 (wholly and exclusively rule) has no direct relevance to management expenses under CTA09/S1219 but a holding company has no special position in relation to S1219 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 S1219 must still be the expenses of managing the holding company's investments, and not the businesses or trades of the subsidiary companies.

There may be a holding company where there is some intermingling of the management of its business and the businesses of the subsidiary companies. In such cases, in practice, you need not disallow expenses if:

• they would have been allowable for UK tax purposes if incurred by the subsidiary, and

• the holding company arranges to charge out future expenses to the subsidiary.