Groups

There are special rules, contained in Finance Act 2008, Sch. 36, para. 35 for issuing third party notices for checking the tax position of parent and subsidiary undertakings. These terms are defined in Companies Act 2006 s. 1161 and 1162 and Sch. 7 as follows:-

  • An ‘undertaking’ is a body corporate, a partnership or unincorporated association carrying on a trade or business, with or without a view to profit.
  • An undertaking is a ‘parent undertaking’ of a subsidiary undertaking if any of the following apply:-

 

  • It holds a majority of the voting rights
  • It is a member of the other undertaking and has the right to appoint or remove a majority of its board of directors
  • It is a member of the undertaking and controls alone, or under agreement with other shareholders or members, a majority of the voting rights in the undertaking.
  • It has the power to exercise, or actually exercises, dominant influence or control over the other undertaking
  • It and the other undertaking are managed on a unified basis
  • It has the right to exercise a dominant influence over the undertaking:-
  • Through provisions in the undertaking’s articles or
  • Through a control contract

 

A ‘subsidiary undertaking’ of a parent undertaking includes subsidiaries of the parent undertaking’s subsidiaries, and so on.

The special rules deal with the situations where a third party notice is issued to:-

  • Any person to check the tax position of the parent undertaking and any of its subsidiary undertakings.
  • The parent undertaking to check the tax position of one or more of its subsidiaries.

There are no special rules governing the issue of a third party notice to a subsidiary undertaking to check the tax position of the parent undertaking or another subsidiary undertaking. The normal third party notice rules apply to these notices.

Worried about your HMRC tax investigation? Call Kinsella Tax Investigations NOW to take the stress away on 0800 471 4546

kinsella_remarketing_banner-300x250-1

We're here to help you. Call 0800 471 4546 for free confidential help and advice 24/7
or fill in your details below.





Enter captcha below:

*Please do not use this form to report suspected tax fraud or evasion or to sell your own services.

kinsella_remarketing_banner-300x250-2
Translate »