IHTM25264 - Investment businesses: Holding company and LLP examples
A Ltd holds a 30% stake in B Ltd and also carries on its own manufacturing activity. The remaining 70% stake in B Ltd is held by a third party. The dividend stream from B Ltd is much more significant than the modest turnover and profits from A Ltd바카라 사이트™s own trade. The value of the 30% stake also far outweighs the value of A Ltd바카라 사이트™s own trade. In these circumstances, A Ltd will generally be regarded as an investment company.
A business is conducted through a limited liability partnership (LLP) which also holds shares in subsidiary companies which provide services to the main business e.g staff services, Research and Development services. The subsidiary companies are investments, but if it can be shown that the investments are used in the LLP바카라 사이트™s business, then the business may not fail the 바카라 사이트˜wholly or mainly바카라 사이트™ test if the dominant nature of the business carried on by the LLP is non-investment.
If business owners of a non-investment Company hold the business premises in an LLP, then no business relief is available on the LLP because the business of the LLP is either dealing in land and buildings or holding investments. This is in contrast to the 50% relief which might be available by virtue of IHTA84/S105(1)(d) if the owners of the property held the property directly.
If a partnership or LLP holds both the shares in a trading company and the premises from which that company operates, no relief is available on the basis that the business of the partnership or LLP is one of holding investments.
No relief is available for interests in an LLP which undertakes a joint venture with another LLP or partnership, because the joint venture company is regarded as an investment. This is the same outcome as for corporate structures where the control condition is not met.
If a partnership or LLP conducts a qualifying trade, and its members are an individual and a company, then relief is available on both the individual바카라 사이트™s interest and the company바카라 사이트™s shares. This is in contrast to the position of partnerships or LLPs holding shares in private trading companies.