SCHEDULES
C1C2SCHEDULE 28B Venture Capital Trusts: Meaning of “qualifying holdings”
Sch. 28B modified (17.9.2004 with effect in accordance with reg. 1(2)(b) of the modifying S.I.) by The Venture Capital Trust (Winding up and Mergers) (Tax) Regulations 2004 (S.I. 2004/2199), regs. 1(1), 13(5)(6)(8)
Meaning of “relevant qualifying subsidiary”
5A
1
For the purposes of this Schedule, a company (“the subsidiary”) is a relevant qualifying subsidiary of the relevant company at any time when it falls within sub-paragraph (2) below.
2
The subsidiary falls within this sub-paragraph if—
a
the relevant company possesses not less than 90 per cent. of the issued share capital of, and not less than 90 per cent. of the voting power in, the subsidiary;
b
the relevant company would—
i
in the event of a winding up of the subsidiary, or
ii
in any other circumstances,
be beneficially entitled to receive not less than 90 per cent. of the assets of the subsidiary which would then be available for distribution to the equity holders of the subsidiary;
c
the relevant company is beneficially entitled to not less than 90 per cent. of any profits of the subsidiary which are available for distribution to the equity holders of the subsidiary;
d
no person other than the relevant company has control of the subsidiary within the meaning of section 840; and
e
no arrangements are in existence by virtue of which any of the conditions in paragraphs (a) to (d) above would cease to be met.
3
Sub-paragraphs (4) to (4C) and (5) of paragraph 10 below apply in relation to sub-paragraph (2) of this paragraph as they apply in relation to sub-paragraph (3) of that paragraph, but with the following modification.
4
That modification is that sub-paragraph (5) of that paragraph is to be read as if the words “or (as the case may be) by another subsidiary of that company” were omitted.
5
For the purposes of this paragraph—
a
the persons who are equity holders of the subsidiary, and
b
the percentage of the assets of the subsidiary to which an equity holder would be entitled,
shall be determined in accordance with paragraphs 1 and 3 of Schedule 18.
6
But in making that determination—
a
references in paragraph 3 of that Schedule to the first company are to be read as references to an equity holder, and
b
references in that paragraph to a winding up are to be read as including references to any other circumstances in which assets of the subsidiary are available for distribution to its equity holders.
Sch. 28B applied (17.9.2004 with effect in accordance with reg. 1(2)(b) of the affecting S.I.) by The Venture Capital Trust (Winding up and Mergers) (Tax) Regulations 2004 (S.I. 2004/2199), regs. 1(1), 12(1)