10(1)Throughout the qualification period relating to the relevant shares the investing company must fall within sub-paragraph (2) or (3).
(2)The company falls within this sub-paragraph at any time when it—
(a)is a single company, and
(b)disregarding any incidental purposes, exists wholly for the purpose of carrying on one or more non-financial trades.
(3)The company falls within this sub-paragraph at any time when—
(a)it is a group company,
(b)the group is a non-financial trading group, and
(c)sub-paragraph (4) applies.
(4)This sub-paragraph applies where the company—
(a)disregarding any incidental purposes, exists wholly for the purpose of carrying on one or more—
(i)non-financial trades, or
(ii)businesses other than trades; or
(b)is the parent company of the group.
(5)For the purposes of determining whether the company falls within sub-paragraph (2)(b) or (4)(a), the purposes for which the company exists shall be disregarded to the extent that they consist in the carrying on of the following activities—
(a)in the case of a single company, the holding and managing of property used by the company for one or more non-financial trades carried on by it,
(b)in the case of a group company, any activities within paragraph 12(3)(a) or (b), and
(c)in any case, the holding of shares to which investment relief is attributable, unless the holding of such shares amounts to a substantial part of the company’s business.
(6)In this paragraph “incidental purposes” means purposes having no significant effect (other than in relation to incidental matters) on the extent of the company’s activities.