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Taxation of Chargeable Gains Act 1992, Cross Heading: Voting rights test is up to date with all changes known to be in force on or before 30 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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Textual Amendments
F1Sch. 7ZA inserted (with effect in accordance with Sch. 13 para. 6(1) of the amending Act) by Finance Act 2016 (c. 24), Sch. 13 para. 5
21(1)P passes the voting rights test in relation to a partnership if, throughout the relevant period, the sum of P's direct voting rights percentage and P's indirect voting rights percentage is at least 5%.U.K.
(2)P's “direct voting rights percentage” is found by—
(a)taking the percentage of the voting rights that P holds directly in each direct interest company that is a member of the partnership, and
(b)where P directly holds voting rights in two or more direct interest companies that are members of the partnership, adding those percentages together.
(3)P's “indirect voting rights percentage” is found by—
(a)calculating the percentage which is P's indirect holding of voting rights in each relevant corporate partner in the partnership through each direct interest company (see paragraph 22), and
(b)where there are two or more relevant corporate partners or two or more direct interest companies, or both, adding those percentages together.
22U.K.The percentage which is P's indirect holding of voting rights in a particular relevant corporate partner in the partnership (“company CP”) through a particular direct interest company (“company DIC”) at a particular time is given by—
where—
T is the fraction of the voting rights in company DIC that is held by P at that time, and
X is the fraction of the voting rights in company CP that is held by company DIC at that time (whether the voting rights are held directly, indirectly, or partly directly and partly indirectly) (see paragraph 23).
23(1)The fraction of the voting rights in a company that is held indirectly by company DIC is calculated—U.K.
(a)by applying sections 1156 and 1157 of CTA 2010, as read with section 1155 of that Act, as if references in those sections to owning the ordinary share capital of a company were references to holding voting rights in a company, and
(b)on the assumptions specified in sub-paragraph (2).
(2)The assumptions are—
(a)where company DIC directly holds more than 50% of the voting rights in a company, company DIC is taken to hold all the voting rights in that company;
(b)where a company other than company DIC (“company B”) directly holds more than 50% of the voting rights in another company (“company C”) which is a member of a group of companies of which company DIC is a member, company B is taken to hold all the voting rights in company C.]
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