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To set up a holding company in the UK, you register a new private limited company with Companies House, online for £100, then move your existing company’s shares into it, usually through a share-for-share exchange. Done correctly, the exchange usually doesn’t trigger Capital Gains Tax for you, but it needs planning before you file.
Our company formation and company secretarial services team registers holding companies and keeps group records up to date. This guide covers each step, the tax reliefs and their conditions, and the downsides to weigh first.
A holding company is a company that owns shares in other companies, called subsidiaries, and usually doesn’t trade itself. The subsidiaries carry out the day-to-day business, while the holding company owns the shares and sometimes property or intellectual property.
A subsidiary can be wholly owned, with 100% of its shares held by the parent, or partly owned. A parent usually controls a subsidiary when it holds more than 50% of the voting rights.
In the UK, most holding companies are private companies limited by shares, registered with Companies House. If you’re still deciding how to trade, start with our guide to sole trader vs limited company.
A pure holding company only owns shares in its subsidiaries. A mixed holding company owns shares and also trades or provides services, such as management services to the group.
You plan the structure, register the new company and then move the existing shares into it. Here are the steps in order:
To register a company limited by shares, you need:
A holding company can receive dividends from subsidiaries tax-free, share losses across the group and move assets between group companies without an immediate tax charge. Each relief has its own conditions, so our Corporation Tax accountants check them before you restructure.
| Relief | What it does | Main condition |
| Dividend exemption | Most dividends a UK company receives are exempt from Corporation Tax | Exempt class of distribution |
| Group relief | Losses in one company can reduce profits in another | 75% subsidiary relationship |
| No gain/no loss transfers | Assets move between group companies without a chargeable gain | 75% capital gains group |
| SDLT group relief | Land moves between group companies without Stamp Duty Land Tax | 75% group, with clawback rules |
| Substantial Shareholding Exemption | A gain on selling a subsidiary’s shares can be exempt | At least 10% held for 12 months within the 6 years before the sale |
| Share-for-share exchange | No Capital Gains Tax for you when shares move to the holding company | Genuine commercial reasons, anti-avoidance rule |
For more on selling a subsidiary, read our guide to the Substantial Shareholding Exemption.
A holding company adds a second set of accounts, a second Company Tax Return and more admin. Depending on your structure, it can also cut the Corporation Tax bands available to each company.
Usually yes, so the £50,000 and £250,000 Corporation Tax limits are divided between associated companies. A passive holding company that only holds subsidiary shares, receives only dividends and passes them on is excluded.
Large groups may also need to pay in quarterly instalments, which our guide to Corporation Tax instalment payments explains.
A holding company adds a second set of accounts, a second Company Tax Return and more admin. Depending on your structure, it can also cut the Corporation Tax bands available to each company.
A holding company works well when you run more than one business, hold valuable assets or plan to sell part of the group. The tax reliefs only apply when the conditions are met, so plan the share exchange before you register anything.
Our team can set up your holding company and handle the filings that follow, with fees agreed upfront after understanding your requirements. Book a free initial consultation to talk through your group structure.
Registering the company with Companies House costs £100 online or £124 by post. Professional fees for the share exchange, clearance and tax advice come on top.
Yes, a mixed holding company can trade as well as own shares. Many stay as pure holding companies to keep trading risk in the subsidiaries.
Usually not, because a share-for-share exchange is treated as a reorganisation rather than a sale. The exchange must have genuine commercial reasons, and HMRC clearance confirms this in advance.
Most dividends a UK company receives are exempt from Corporation Tax. You pay Income Tax on dividends only when the holding company pays them out to you personally.
Yes, every UK company files annual accounts with Companies House and a Company Tax Return with HMRC. That applies to the holding company and each subsidiary.
A holding company can own shares in subsidiaries, property, intellectual property and other assets. Moving assets in from a trading company can have tax costs, so check before you transfer.
