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Readers’ forum: Business property

24 March 2020
Issue: 4737 / Categories: Forum & Feedback
Business property relief on shares in holding company.

My clients are in business with the following group structure: Karl and Mark own the shares of HoldCo HoldCo then owns the A shares (75%) of TradeCo and Karl and Mark’s children own the B shares of TradeCo. HoldCo owns a property now of substantial value at which the trade is undertaken and TradeCo undertakes the trading activities. The B shares have no rights other than an entitlement to receive dividends. In practice for many years TradeCo has paid dividends annually on the B shares only with no dividends voted on the A shares. This might support a view that the holders of the A shares are not as a matter of fact enjoying the economic rights of the underlying trade.

Could Taxation readers comment on the relevance of the latter point when considering...

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