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HMRC internal manual

Company Taxation Manual

Corporation Tax: management expenses: groups

For guidance on expenses incurred by grouped or associated trading companies to which Case I rules apply, see BIM42140.

CTA09/S54 has no direct relevance to management expenses under CTA08/S1219 but a holding company has no special position in relation to Section 1219 because it happens to be part of a group. It is a member of a group because of the degree of its investments in other companies and the other companies remain separate legal entities. The allowable expenses under Section 1219 must still be the expenses of managing the holding company’s investments, and not the businesses or trades of the subsidiary companies.

You may have a case of a holding company where there is some intermingling of the management of the business of the holding company and the businesses of the subsidiary companies. In such a case, in practice, you need not disallow expenses:

  • if the expenses would have been allowable for UK tax purposes if incurred by the subsidiary,


  • if the holding company arranges to charge out future expenses to the subsidiary.