Company Structure Question

[Mightymarcoose]

I am thinking about moving back to the UK. I am in internet marketing and was considering the following structure/plan.

Company A - Internet marketing business that makes commissions.
Company B - Property investment/development

To limit corporation tax, lend the profits company A makes and invest them into property using company B. Ideally I wouldn't run a profit through company A as all profits would go into property B, growing the property portfolio.

Would this be a legitimate thing to do?

 

[billmccallum1957]

No, the profits are taxable, what's left after tax could be invested.

 

[Clinton]

You seem to believe that money lent from A to B will fall in A's Profit & Loss account thus reducing the profit that A makes.

This is not how it works. The loan is a capital item for the balance sheet and not an "expense" you can write off.

Ideally I wouldn't run a profit through company A...

You don't have a choice in the matter. The money that A makes is A's profit. You have to pay tax on it first before lending anything to B.

 

[Mightymarcoose]

OK well good to know it isn't an option. Thanks for the replies.