Using Ltd Co Losses


J

John Crook

Any thoughts on this would be appreciated:

Husband runs a nursing agency through a Ltd company. Incurs £100k losses -
activity running down. Wife runs a cleaning company as partnership with
husband (not ltd) and makes £60k profits and growing.

How can the losses be used against the profits? If Ltd Co takes over
partnership can the losses be offset? If management charges are made from
Ltd Co to partnership real money has to be paid into the Ltd Co.

Many thanks

John
 
Ad

Advertisements

J

Jon Griffey

John Crook said:
Any thoughts on this would be appreciated:

Husband runs a nursing agency through a Ltd company. Incurs £100k losses -
activity running down. Wife runs a cleaning company as partnership with
husband (not ltd) and makes £60k profits and growing.

How can the losses be used against the profits? If Ltd Co takes over
partnership can the losses be offset? If management charges are made from
Ltd Co to partnership real money has to be paid into the Ltd Co.
If the company takes over the partnership business then broadly speaking
losses incurred by the company beforehand cannot be offset against
future profits of the new trade. i.e. trading losses carried forward
can only be offset against trading losses of the same trade. It is
doubtful whether a nursing agency can be construed as the same trade as
a cleaning company.
--
Jon Griffey FCCA ATII
Hackett Griffey
Chartered Certified Accountants & Registered Auditors
2 Mill Road, Haverhill, Suffolk, CB9 8BD

Tel (01440) 762024

www.griffey.demon.co.uk

See website for disclaimers
 
F

Fred

Jon Griffey said:
If the company takes over the partnership business then broadly speaking
losses incurred by the company beforehand cannot be offset against
future profits of the new trade. i.e. trading losses carried forward
can only be offset against trading losses of the same trade. It is
doubtful whether a nursing agency can be construed as the same trade as
a cleaning company.
--
Jon Griffey FCCA ATII
Hackett Griffey
Chartered Certified Accountants & Registered Auditors
2 Mill Road, Haverhill, Suffolk, CB9 8BD

Tel (01440) 762024

www.griffey.demon.co.uk

See website for disclaimers
Can't cleaning company make a loan to nursing company? Initially
corporation tax would be paid on this "asset" by the cleaning co. but if the
money was recouped the money could be taken out or if the nursing company
should fold you'd get relief on the loss.

IANAA
 
D

David Floyd

Can't cleaning company make a loan to nursing company? Initially
corporation tax would be paid on this "asset" by the cleaning co.
WHAT?

CT is payable on assets of loans!

DF
 
Ad

Advertisements

F

Fred

David Floyd said:
WHAT?

CT is payable on assets of loans!

DF
I assume that the same money would otherwise have been paid as dividend. If
it is effectively left in the company then won't it attract corporation tax?
Why wouldn't the loan be an asset. It's not fluid money, and could be
traded. It doesn't disappear unless the nursing company folds.
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top