Taxation of Chargeable Gains Act 1992

1 (1) This paragraph and paragraphs 2 and 3 below have effect for the purposes of this Schedule and sections 163 and 164.

(2) In the provisions referred to above—

• “commercial association of companies” means a company together with such of its associated companies, within the meaning of section 416 of the Taxes Act, as carry on businesses which are of such a nature that the businesses of the company and the associated companies taken together may be reasonably considered to make up a single composite undertaking;

• “family company” means, in relation to an individual, a company the voting rights in which are—

  (i)

  as to not less than 25 per cent. exercisable by the individual, or

  (ii)

  as to more than 50 per cent. exercisable by the individual or a member of his family and, as to not less than 5 per cent. exercisable by the individual himself;

• “family” means, in relation to an individual, the husband or wife of the individual and a relative of the individual or of the individual’s husband or wife and, for this purpose, “relative” means brother, sister, ancestor or lineal descendant;

• “full-time working director”, in relation to one or more companies, means a director who is required to devote substantially the whole of his time to the service of that company or, as the case may be, those companies taken together, in a managerial or technical capacity;

• “group of companies” means a company which has one or more 51 per cent. subsidiaries, together with those subsidiaries;

• “holding company” means a company whose business (disregarding any trade carried on by it) consists wholly or mainly of the holding of shares or securities of one or more companies which are its 51 per cent. subsidiaries;

• “permitted period” means a period of one year or such longer period as the Board may, in any particular case, by notice allow;

• “trade”, “profession”, “vocation”, “office” and “employment” have the same meaning as in the Income Tax Acts;

• “trading company” means a company whose business consists wholly or mainly of the carrying on of a trade or trades;

• “trading group” means a group of companies the business of whose members, taken together, consists wholly or mainly of the carrying on of a trade or trades.

(3) For the purposes of sub-paragraph (2) above, voting rights exercisable by trustees of a settlement are to be treated as voting rights exercisable by a member of the family of an individual if—

(a) the individual or any member of his family is a beneficiary under the settlement; and

(b) no one, other than the individual or a member of his family, is for the time being entitled under the settlement to receive any capital or income of the settled property; and

(c) the terms of the settlement are such that no one other than the individual or a member of his family can become entitled to capital or income except upon the failure (for whatever reason) of the individual or a member of his family to become so entitled.

(4) Any reference in sub-paragraph (3) above to a person being or becoming entitled to any capital or income of the settled property includes a reference to a person—

(a) whose entitlement is subject to a power which could be so exercised as to require all or any of the capital or income in question to be paid to some other person; or

(b) whose entitlement depends upon his exercising a power in his own favour.