As your business grows, so does what it stands to lose. A well-designed group puts a holding company above your trading company, so your premises, surplus cash and brand can sit apart from day-to-day trading risk. If the trading side ever hits trouble, those assets are insulated. We build these structures the right way, with genuine commercial substance, and we will tell you plainly when one is not worth it for you.
Most owner-managed businesses grow up inside a single limited company. Every valuable thing you own ends up in the same place that carries every risk. That works until it doesn't.
Let's fix itYour trading premises, built-up cash reserves and brand all sit in the same company that signs contracts, employs staff and could one day face a claim or insolvency.
You are thinking about selling part of the business one day, but you have no idea whether the structure you have will cost you dearly in tax when that day comes.
You have heard holding companies can protect assets and be tax-efficient, but you are wary of anything that smells like a scheme, and you want a straight answer on whether it is even legitimate for you.
You worry that reorganising now could trigger stamp duty, capital gains charges or an HMRC challenge, and nobody has explained the traps in plain English.
A group is not a tax trick. It is the accepted, commercial way to separate value from risk, using genuine reliefs that UK tax law provides for exactly this purpose. Here is what a group structuring engagement with us covers.
We design a structure where your holding company sits above the trade and can hold property, surplus cash and IP separately. If the trading company ever fails, litigates or goes insolvent, those assets are insulated from its creditors. This is asset protection and resilience, not avoidance.
Dividends a UK trading subsidiary pays up to its UK holding company are, in almost all cases, exempt from corporation tax in the holding company's hands under the Part 9A distribution-exemption rules. So once the subsidiary has met its own corporation tax and has distributable reserves, it can pass surplus profit up to the holding company with no further corporation tax on the way up, moving it out of harm's way and ring-fencing it above the trade.
The Substantial Shareholding Exemption can fully exempt from corporation tax the gain when a company sells shares in a qualifying trading subsidiary, where at least a 10% holding has been held for a continuous 12-month period at some point in the six years before the sale, and the trading conditions are met. We plan structures so a future disposal of part of the group can qualify.
Within a 75% group, current-year trading losses in one company can be surrendered against another group company's profits, capped at the lower of the loss available and the profits to shelter (and, under the post-2017 rules, certain carried-forward losses can be surrendered too). A tough year in one subsidiary can cushion a good year in another, so the group as a whole is steadier.
We never gloss over the traps. Moving property between group companies can attract SDLT (relieved within a 75% group, but clawed back if the company leaves within 3 years), and moving chargeable assets can trigger a capital gains degrouping charge if a company leaves within 6 years. Putting a residential dwelling worth over £500,000 into a company can trigger the 17% flat SDLT rate on the way in, and an annual ATED charge (an annual tax on homes held in companies) each year it is held, unless a relief such as the property-rental-business relief applies. We map every clock before you commit.
Every structure we build must stand on real commercial purpose. Anti-avoidance rules, including the transactions-in-securities rules and the company winding-up TAAR (an anti-avoidance rule aimed at liquidate-and-restart schemes), exist precisely to catch arrangements whose main purpose is an unfair tax advantage. We keep you firmly on the right side of that line, recommend HMRC clearances where relevant, and walk away from anything that looks contrived.
A no-obligation chat — we learn your business, spot what's costing you, and tell you exactly where we can help.
One fixed fee, agreed in writing before anything starts. No hourly billing, no surprise invoices, no clock-watching.
We do the switch, deal with HMRC, and keep everything filed on time — you deal directly with Bobby, not a call centre.
A qualified, regulated practice — never described as chartered, always straight with you. Bobby's been in accountancy since sixteen.
You know the cost before we start. No hourly billing, no surprise invoices at year end.
You deal with the person doing the work — not a call centre, not a rotating account manager.
Xero, QuickBooks or FreeAgent means we work with you wherever you are — rooted in Kent, working nationwide.
It is entirely legitimate when done for genuine commercial reasons. A group structure is the accepted way to separate valuable assets from trading risk, and HMRC's own guidance treats a group as a single economic unit for reliefs like group loss relief. The key is genuine commercial substance. What matters is that the structure protects real assets or supports a real business plan, not that it manufactures a tax advantage. We only build structures that stand on their own commercial merit, and where useful we obtain HMRC clearances to confirm the position.
Your holding company sits above your trading company and can hold property, surplus cash and intellectual property separately from the company that does the day-to-day trading. Because those assets are owned outside the trading company, they are insulated from that company's creditors, litigation and insolvency risk. If the trading side ever hits serious trouble, the value you have built up elsewhere in the group is far better protected than if everything sat in one company.
Not necessarily, but there are real charges to plan around. Transfers of chargeable assets between group companies generally happen at no gain, no loss, and property moved within a 75% group can qualify for SDLT group relief. The catch is the clawbacks: SDLT relief is withdrawn if the company leaves the group within 3 years, and a capital gains degrouping charge can arise if a company leaves within 6 years. Putting a residential dwelling worth over £500,000 into a company also triggers a 17% flat SDLT rate on the way in and an annual ATED charge, unless a business-use relief applies. We map all of this before anything moves.
You can potentially sell a subsidiary without a corporation tax charge on the gain, thanks to the Substantial Shareholding Exemption. To qualify, the selling company must have held at least 10% of the subsidiary for a continuous 12 months within the previous 6 years, and the subsidiary must be a genuine trading company throughout. One important caution: too much surplus cash or investment property in the company being sold can make it fail the trading test (HMRC treats more than about 20% non-trading activity as substantial), which is why ring-fencing and sale planning have to be balanced carefully. SSE also exempts the company-level gain only, not your personal tax on eventually extracting the cash.
Often, no, and we will tell you so. A group suits businesses with genuinely separable valuable assets, more than one trade, real third-party risk, or plans to sell part of the business. For a small single-trade company with few assets, the setup and running costs, the extra accounts and filings, the clawback traps, and the fact that more group companies lower your corporation tax marginal-relief thresholds usually outweigh the protection. We would rather turn work away than sell you a structure you do not need. Not sure a group is right for you? Have a straight conversation with Bobby Gardiner (CAT FMAAT). We will map your assets, your risks and the clocks that matter, and tell you plainly whether a group earns its keep for you, on a fixed fee agreed upfront, before you spend a penny restructuring.
Book a free, no-obligation review. We'll show you exactly where we can help — and what it'll cost, upfront.
