Finance (No. 2) Act 2023

290 Election for members with significant minority shareholding to pay levy

(1) This section applies where—

(a) a generating undertaking that is a group is liable to an amount of electricity generator levy for a qualifying period,

(b) a subsidiary member of that group (“the relevant member”) has, at any time in that period, at least one significant minority shareholder,

(c) some, or all, of that amount is attributable, on a fair and reasonable basis, to the activities of the relevant member and, if it has one or more relevant subsidiaries, those relevant subsidiaries.

(2) Where this section applies, the lead member of the group may elect that so much of the amount as is attributable to the activities of the relevant member and (where it has one or more relevant subsidiaries) its relevant subsidiaries must be paid by that member.

(3) But the other members of the group are jointly and severally liable for that amount.

(4) An election under this section in respect of an amount of electricity generator levy for a qualifying period must be made no later than 9 months after the end of that period.

(5) For the purposes of this Part—

(a) a person (“P”) is a significant minority shareholder in a subsidiary member of a group (“S”) if P is not a member of the group and—

(i) P is beneficially entitled to 10% or more of any profits available for distribution to equity holders of S,

(ii) P would be beneficially entitled to 10% or more of any assets of S available for distribution to its equity holders on a winding-up, or

(iii) at least 10% of S‘s ordinary share capital is owned by P, and

(b) a group of companies (other than the group S is a member of) is a significant minority shareholder in S if—

(i) members of the group are, between them, beneficially entitled to 10% or more of any profits available for distribution to equity holders of S,

(ii) members of the group between them would be beneficially entitled to 10% or more of any assets of S available for distribution to its equity holders on a winding-up, or

(iii) at least 10% of S‘s ordinary share capital is owned by members of the group.

(6) For the purposes of this section and sections 296 and 297, a company is a relevant subsidiary of another company if it is a 75% subsidiary of—

(a) that other company,

(b) a 75% subsidiary of that other company, or

(c) a 75% subsidiary of a 75% subsidiary of that other company, and so on.