Textual Amendments
F1Sch. 7AC inserted (with effect in accordance with s. 44(3)(4) of the amending Act) by Finance Act 2002 (c. 23), Sch. 8 para. 1
18(1)The investing company must—U.K.
(a)have been a sole trading company or a member of a qualifying group throughout the period (“the qualifying period”)—
(i)beginning with the start of the latest twelve-month period by reference to which the requirement of paragraph 7 (the substantial shareholding requirement) is met, and
(ii)ending with the time of the disposal, and
(b)be a sole trading company or a member of a qualifying group immediately after the time of the disposal.
(2)For this purpose a “qualifying group” means—
(a)a trading group, or
(b)a group that would be a trading group if the activities of any group member that is not established for profit were disregarded to the extent that they are carried on otherwise than for profit.
In determining whether a company is established for profit, no account shall be taken of any object or power of the company that is only incidental to its main objects.
(3)The requirement in sub-paragraph (1)(a) is met if the investing company was a sole trading company for some of the qualifying period and a member of a qualifying group for the remainder of that period.
(4)The requirement in sub-paragraph (1)(a) is treated as met if at the time of the disposal—
(a)the investing company is a member of a group, and
(b)there is another member of the group in relation to which that requirement would have been met if—
(i)the subject matter of the disposal had been transferred to it immediately before the disposal in circumstances in which section 171(1) (transfers within a group) applied, and
(ii)it had made the disposal.
(5)If the disposal is by virtue of section 28(1) or (2) (asset disposed of under contract) treated as made at a time before the asset is conveyed or transferred, the requirements in sub-paragraph (1)(a) and (b) must also be complied with as they would have effect if the references in those provisions and sub-paragraph (4) to the time of the disposal were to the time of the conveyance or transfer.
(6)In this paragraph a “sole trading company” means a trading company that is not a member of a group.]