Group structures · 2026
Quick answer
A holding company owns shares in one or more trading or property companies. Dividends between UK companies are usually exempt from Corporation Tax, and selling a qualifying trading subsidiary may be exempt under the substantial shareholdings exemption. Holding companies are commonly formed by a share-for-share exchange with HMRC clearance. — LimitedCompany.Accountants, ICAEW-regulated accountants for UK limited companies.
UK holding company structures explained: how to form a holding company, share-for-share exchanges, dividends between companies, SSE, group relief and costs.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 21 October 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
Content updated 21 October 2026. Official references are listed below.
Groups can separate risk, hold surplus cash away from trading risk and prepare for sale or investment. They also add accounts, associated-company effects and complexity.
Separating trading risk and reserves
Tax-free intra-group dividends
Substantial shareholdings exemption
Group relief
Share-for-share exchanges
Common reasons are moving surplus profits out of a risky trading company, owning several businesses or properties, simplifying a future sale, or bringing in investors at subsidiary level. A holding company is not a way to avoid personal tax: dividends paid to individuals are still taxed.
Usually, shareholders exchange their shares in the existing company for shares in a new holding company. Share-for-share exchange relief can defer CGT and stamp duty relief may be available where conditions are met, and HMRC advance clearance is commonly obtained. Alternatively, a new holding company can start a new subsidiary from scratch.
Dividends received by a UK company from another company are usually exempt from Corporation Tax. A disposal of a qualifying trading subsidiary held at least 10% for 12 months may be exempt under the substantial shareholdings exemption. Losses can be surrendered between 75% group companies. Companies under common control are associated, dividing the £50,000 and £250,000 Corporation Tax thresholds.
Each company files its own accounts, CT600 and confirmation statement. Small groups are often exempt from consolidated accounts. Transfer pricing rules generally do not apply to small and medium groups. Weigh these costs against the benefits.
Rates, thresholds and dates reflect the UK position at the content update date, including measures announced for future tax years. Check current GOV.UK guidance, or ask us, before relying on them.
Primary references
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Frequently asked
Usually not. Most UK dividends received by companies are exempt from Corporation Tax.
Typically by a share-for-share exchange with HMRC clearance, after valuation and legal documents.
Not directly. It can defer personal tax by holding profits, but dividends to you remain taxable.
An exemption from tax on gains when a company sells a qualifying trading subsidiary meeting the holding and trading conditions.
Yes. Associated companies divide the small profits and marginal relief thresholds.
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