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Posted Tue, 16 Jul 2024 16:59:49 GMT by LordWilmore
I am a software contractor who works through my own Limited company. My wife is setting up a company with the purpose of buying a house to rent out as a landlord. This new company would take an initial injection of money from equity that we are releasing on our home, which is in both of our names. Whilst the two companies are completely separate from each other, would these two companies be considered Associated Companies given that the initial money is coming from equity on a home that is under the name of both me and my wife? Would it effect matters if the equity release is paid in to a bank account that is solely in her name, rather than to a joint account or my own account?
Posted Wed, 17 Jul 2024 13:41:48 GMT by HMRC Admin 20 Response
Hi,
A company is an ‘associated company’ of another company if either: 
. One of the two companies has control of the other. 
. Both companies are under the control of the same person or persons. 
Guidance on the definition of ‘control’ can be found at CTM60220 - Close companies: tests: control - over the company's affairs.  
Please see the example at the bottom of CTM03770, which is pertinent to your situation. 
It does not matter for tax purposes whether the equity release is paid into your wife’s sole account. What is important is whether any of the money invested in your wife’s company legally belongs to you.
If you need more information than that provided in HMRC guidance, we suggest that you take advice from a tax professional.
Thank you.

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