Thinking about simplifying your group structure? We look
at how best to restructure for tax purposes.
In recent years, we have seen mergers between housing
association groups which have led, in some cases, to very
complicated structures. These often include a large number of
entities, including charitable RPs, non-charitable RPs and
non-charitable, non-RP companies. It was also fashionable in the
late nineties/early noughties to create group structures that were
'ready for anything', with separate entities being created
to carry out each activity of the RP group.
Apart from the administrative and governance issues that such
unwieldy structures bring, they can also increase the rate at which
corporation tax has to be paid by taxable group entities, give rise
to the need to consider transfer pricing issues on inter-company
transactions, and inhibit the ways in which profits earned by
non-charitable entities within the group can be sheltered by gift
aid payments.
