(boring topic) associated companies - definition. Help?

[gianlu]

wondering if anyone can help me here (while I'm trying to find an accountant slightly more skilled than mine):

I'm director in uk ltd a company, which is 40pct mine and 60 pct owned by an italian company.
The Italian company then owns another 2 companies in Sapin and South Africa.

Now, we need to determine which tax thershold is applicable to the UK business. And to do so we need to determine what is defined associated company.

My understanding is that (for HMRC) there is a total of 2 associated companies, hence we should have 'small rate' up to 150k while the higher threshold drops from 1.5million to 750k (no, we are not there, not even close).

But as per my accountant even Spain and South Africa should be considered associates, hence the low rate threshold should drop to 75k while the highest down to 375k.
In this case we will be well and truly in...

Can anyone help? I can pay if there is any profesisonal to assist.
Or I may pay a beer (or six) for a quick update here!

[anonymous-user]

I agree with your accountant and say they are all associated

But i am not suitably qualified for that to be relied on

[hornet]

Certainly not to be taken as gospel, as I'm still in the middle of studying it, but I think the following accounting standards apply, if it helps?

IFRS3 - Business Combinations
IAS28 - Investment in Associates

That's from the point of view of the parent company rather than you, but might be useful?

[sumo69]

I am a chartered accountant as well as a chartered tax advisor.

Putting this directly, on the facts presented, there are 3 associated companies to you meaning the limits of £300k and £1.5million are divided by 4 to £75k and £375k.

Are there any loss making companies? Group relief may reduce your tax bill.

David