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Close investment-holding companies: Corporation Tax and CT600 box 4

Last updated: 10 October 2026

Short version. A close investment-holding company pays the full Corporation Tax main rate. From 1 April 2023 this is 25%, without small profits rate or marginal relief. CT600 box 4 uses code 2.

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1. Apply the purpose test for each tax period

A close company, defined in CTA 2010 s.439, is a CIHC unless throughout the accounting period it exists wholly or mainly for one or more permitted purposes. These include commercial trading, commercial letting of land to unconnected people and specified group holding and service purposes. Read HMRC’s complete list and connected-person conditions. The classification is your decision or your accountant’s.

Holding a bank deposit can fall within CIHC status. Having some trading income does not automatically rule it out. Apply the statutory purpose test, rather than treating one income figure as the answer.

CTA 2010 s.18N(5) provides a limited exception for the accounting period beginning with a winding up, where the company was not a CIHC in the preceding period. Preparing to strike off does not by itself establish that exception. HMRC says the exception does not apply to administration.

From 1 April 2015 to 31 March 2023, the single-rate regime applied. A period crossing that date uses the full rate for each financial-year part. For long accounts periods, status can differ between the two CT600 returns.

For example, a fictional CIHC with £24,000 taxable profits wholly in financial year 2025 pays £6,000 Corporation Tax. There is no small-profits reduction.

2. Check your CT600 and computation

Check code 2 in box 4, the full rate in each financial-year block, and no small-profits-rate indicator or marginal relief. Associated-company counts can still matter for quarterly instalments.

Follow the exact CIHC filing steps. For later receipts, read post-cessation receipts and box 205. This is general filing guidance, not a determination of your company’s status.

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