Corporate partner 2

I refer to the query Corporate partner. I can see the tax advantage in a company taking part in higher-rate partnership profits; however what happens next?

Dividends withdrawn from the company will be charged back into personal higher-rate tax (assuming similar ownership as the partners) and capital expenditure cannot utilise all reliefs (whereas expenditure in the former old partnership could).

Loans made from the company to the main partnership could be chargeable under ‘loans to participators’ unless commercial reasons exist for the introduction of the company to the firm.

Readers’ views on the advantages of corporate partnerships over the medium to long term would be appreciated as well as comments on extraction and/or wind-up methods when the company is no longer needed.

Query 17 842 – Naive

Reply from The Snark

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