Close Investment-Holding Company (CIHC) and Corporation Tax

What Is a Close Investment-Holding Company?

A close investment-holding company (CIHC) is a type of close company that does not qualify for the small profits rate of corporation tax. If your company qualifies as a CIHC, it pays corporation tax at the main rate of 25% on all profits, regardless of their size — the 19% small profits rate does not apply.

A company is a CIHC if it is a close company (broadly, controlled by five or fewer participators) and does not fall into one of the excluded categories below. Most investment companies — those that accumulate wealth through interest, dividends, or other passive income rather than actively trading — are CIHCs.

Excluded from CIHC Status (These Companies Are NOT CIHCs)

A close company is not a CIHC if it exists wholly or mainly for one or more of the following purposes (per Section 34 CTA 2010):

• Carrying on a trade on a commercial basis
• Letting land (a property company)
• Holding shares or securities in non-CIHC group companies that themselves trade or let land
• Coordinating the administration of two or more group companies

If your company earns primarily interest income with no trading activity, it will likely be a CIHC.

Tax Rate for CIHCs

Profit level	Normal small company	CIHC
Under £50,000	19% (small profits rate)	25%
£50,000–£250,000	19–25% (marginal relief)	25%
Over £250,000	25%	25%

CIHCs are specifically excluded from the small profits rate and marginal relief by Section 18A CTA 2010. The full 25% main rate applies to all taxable profits.

Does TinyTax Support CIHCs?

TinyTax does not currently support the CIHC designation. The platform calculates tax using the standard rate structure — 19% for profits under £50,000, with marginal relief for profits between £50,000 and £250,000. There is no option to designate a company as a CIHC and apply the flat 25% rate to smaller profits.

If your company is a CIHC with profits below £50,000, TinyTax will calculate tax at 19%, which would be incorrect.

What to Do If Your Company Is a CIHC

If your company qualifies as a CIHC, you have a few options:

1. HMRC Online Filing — HMRC's own CT600 online service supports the CIHC designation. You can file directly via the Government Gateway.
2. Specialist accountancy software — Tools such as Iris, Taxfiler, or similar CT600 software support the full range of company types including CIHCs.
3. Engage an accountant — An accountant can prepare and file the return on your behalf using appropriate software.

Common Questions

My company only earns bank interest — is it a CIHC?

Probably yes, if it is a close company (controlled by five or fewer shareholders) and does not carry on a trade. A company whose only activity is receiving interest income from cash on deposit would typically be a CIHC and cannot use the small profits rate.

Does CIHC status affect Companies House accounts?

No. CIHC is a corporation tax classification only. Your Companies House accounts are filed in the normal way regardless of CIHC status.

Can I use TinyTax for anything if my company is a CIHC?

You can use TinyTax to prepare and file your Companies House accounts. However, the CT600 tax calculation will not reflect CIHC status correctly, so you would need to file your CT600 separately using a service that supports the CIHC designation.