25(1)A trade is a qualifying trade if—U.K.
(a)it is carried on wholly or mainly in the United Kingdom,
(b)it is conducted on a commercial basis and with a view to the realisation of profits, and
(c)it does not consist wholly or as to a substantial part in the carrying on of excluded activities.
(2)The carrying on of activities of research and development from which it is intended that a connected qualifying trade will be derived or benefit is treated as the carrying on of a qualifying trade.
But preparing to carry on such activities does not count as preparing to carry on a qualifying trade.
(3)For the purposes of sub-paragraph (2) a “connected qualifying trade” means a qualifying trade carried on—
(a)by the company carrying on the activities of research and development, or
(b)if that company is a member of a group, by [F1the issuing company or any of its qualifying 90% subsidiaries].
Textual Amendments
F1Words in Sch. 15 para. 25(3)(b) substituted (22.7.2004) (with effect in accordance with Sch. 20 para. 15 of the amending Act) by Finance Act 2004 (c. 12), Sch. 20 para. 9