Charity Trading Subsidiaries - Advanced Tax Issues for Accountants

Introduction

Trading subsidiaries are a familiar feature of charity structures, but establishing a subsidiary is only the beginning. Difficult tax, accounting and company law issues can arise in the ongoing relationship between a charity and its trading company, particularly when profits, costs, funding and assets move between the two entities.

This new virtual classroom seminar is aimed at accountants and tax advisers who already understand the basic principles of charity trading and would like to explore the more difficult tax issues arising in charity-subsidiary structures and the practical problems that can occur when arrangements that appear straightforward are considered in greater detail.

This session will focus primarily on direct tax but will also consider VAT, accounting and company law issues.

What You Will Learn

This live and interactive session will cover the following:

• Does the activity belong in a subsidiary?
• When a trading subsidiary is actually required or useful
• Primary versus non-primary purpose trading and other exemptions
• Charity law considerations and risks
• When using a subsidiary can create unnecessary complexity
• Reviewing established structures that may no longer be appropriate
• Funding the trading subsidiary
• Share capital, loans and other funding arrangements
• Tax implications for the parent charity
• Approved charitable investments
• Funding working capital
• Funding a loss-making subsidiary
• Restructuring debt - waivers and capitalisation
• Gift Aid payments to the parent charity
• What qualifies as a charitable donation
• Corporation tax relief and the nine-month rule
• Taxable profits versus distributable reserves
• When a Gift Aid payment can become an unlawful distribution
• Accounting treatment and timing
• How much reserves does the subsidiary have at the date of payment?
• Group/consortium relief
• Intercompany arrangements
• Shared employees, premises and other resources
• Management and service charges
• Allocation and recharging of costs
• Intercompany balances and loans
• Documentation and evidence
• Transfer pricing
• Intra-group movement of assets and activities
• VAT considerations
• VAT registration and grouping
• Shared employees, premises and other resources
• Charity VAT reliefs
• Practical problem areas
• Common mistakes in established charity-subsidiary structures
• Year-end planning and Gift Aid
• Governance and documentation
• Case studies demonstrating where apparently routine arrangements can go wrong

Recording of live sessions: Soon after the Learn Live session has taken place you will be able to go back and access the recording - should you wish to revisit the material discussed.