The New UK International Holding Company In June 2002 the UK government introduced a capital gains tax exemption for UK companies with substantial shareholdings in another company. The new rules have now been clarified and apply to UK registered companies, foreign registered companies resident in the UK for tax purposes, as well as UK branches of companies registered outside the UK. The following requirements must be observed: The Investing company (or Holding company) must hold at least 10% of the ordinary share capital of the Subsidiary company for at least 12 continuous months (the 12 months must not begin more than 2 years prior to the disposal of the shares). The Investing company (or Holding company) must be a trading company by itself or a holding company of a trading group during the 12 months period mentioned above. The Subsidiary company must be either a trading company by itself or the Holding company of a trading group for the whole of the 12 month period. Trading activities mean activities in a trade, profession, or vocation carried on, on a commercial basis with a view of generating profits. Similar provisions apply for group companies. The UK Holding company can be a standard UK company and therefore should be no more expensive to incorporate. These developments therefore make the UK Holding company one of the most cost effective and efficient Holding company solutions in the world.

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