Associating spouses

12 June 2012 / Curtis

Issue: 4357 / Categories: Forum & Feedback

A husband and wife each own one-third of the other’s company, owning the other two-thirds themselves. The companies operate in completely different markets, but the spouses each help out in the other’s business

How should the associated companies rules apply since ESC C9 was legislated? The shareholdings of a husband (H) and wife (W) were always added together to determine common control but now that should only happen if the companies are ‘commercially interdependent’.

Suppose H and W have set up two companies operating in completely different markets. H is the prime influence in one and W is the prime influence in the other but because they are married they help in each other’s business and share the ownership 2:1 and 1:2. There are no loans or other factors that would give either spouse de facto control of both companies on their own.

Under the old rules the companies would be associated. Under the new rules they should only be associated if they are commercially interdependent and that depends on close financial organisational and economic links....

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Subscribe Now...

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.

Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.