I guess this has been asked here few times, but couldn't get clarity on few points
Scenario
I've got my Limited company running for 6 years (OldCompany) and I wanted to start a small start-up company (NewCompany). Needed to have a seed capital of 20K for NewCompany which I was thinking to fund from OldCompany. I've got accountant for OldCompany but not planning for NewCompany as the profits may not be good enough initially.
Few queries
1. The company-to-company loan from OldCompany to NewCompany. If the Loan traverses the Company year end of
OldCompany, will I need to pay corporation tax for that year on the loan from OldCompany? Or should I pay Corp Tax when NewCompany pays it back?
2. Is it better to start NewCompany as subsidiary of OldCompany i.e. owned by OldCompany to get the loan?
3. If I make a loss in NewCompany but say transfer only £15K back to OldCompany how does the calculations happen? If I setup as Subsidiary, will this be offset against OldCompany profits?
Scenario
I've got my Limited company running for 6 years (OldCompany) and I wanted to start a small start-up company (NewCompany). Needed to have a seed capital of 20K for NewCompany which I was thinking to fund from OldCompany. I've got accountant for OldCompany but not planning for NewCompany as the profits may not be good enough initially.
Few queries
1. The company-to-company loan from OldCompany to NewCompany. If the Loan traverses the Company year end of
OldCompany, will I need to pay corporation tax for that year on the loan from OldCompany? Or should I pay Corp Tax when NewCompany pays it back?
2. Is it better to start NewCompany as subsidiary of OldCompany i.e. owned by OldCompany to get the loan?
3. If I make a loss in NewCompany but say transfer only £15K back to OldCompany how does the calculations happen? If I setup as Subsidiary, will this be offset against OldCompany profits?
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