UK International Holding company

A UK company, having  “substantial” shareholdings in subsidiaries which are part of a “trading” group, can qualify for capital gains tax exemption when the investments are sold.  This important CGT exemption is subject to the following conditions:

1. The shareholding in the subsidiary must be at least 10{e68217344b855fcd608ed2c4c41f83644da7cd41ea524fbfa2ad06c632d3255d} of the voting power of the subsidiary.

2.  The investment must be held for a minimum period of at least 12 months.

3.  The group must remain a “trading” group both before and after the disposal.

Another benefit of using UK holding companies is that foreign dividends are exempt subject to certain conditions (see separate article).  Also there is no UK withholding tax on dividends paid out of a UK company even to an offshore or tax-haven jurisdiction.