SCHEDULES
SCHEDULE 5Enterprise management incentives
Part 3Qualifying companies
Meaning of “qualifying subsidiary”
11
1
A company (“the subsidiary”) is a qualifying subsidiary of a company (“the holding company”) if the following conditions are met.
2
The conditions are—
F2a
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2b
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2c
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F7ca
that the subsidiary is a 51% subsidiary of the holding company;
d
that no person other than the holding company F8or another of its subsidiaries has control of the subsidiary; and
e
that no arrangements are in existence by virtue of which F4either of the conditions in paragraphs (ca) and (d) would cease to be met.
F13
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Sub-paragraph (5) applies at a time when the subsidiary or another company is being wound up.
5
The subsidiary is not to be regarded as having ceased, on account of the winding up, to be a company in relation to which the conditions in sub-paragraph (2) are met if—
a
the conditions in that sub-paragraph would be met apart from the winding up, and
b
the winding up is for commercial reasons and is not part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax.
6
Sub-paragraph (7) applies at a time when arrangements are in existence for the disposal by—
a
the holding company, or
b
another subsidiary of the holding company,
of all of its interest in the subsidiary.
7
The subsidiary is not to be regarded as having ceased, on account of those arrangements, to be a company in relation to which the conditions in sub-paragraph (2) are met if the disposal is to be for commercial reasons and is not to be part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax.
F58
Sub-paragraph (9) applies at a time when the subsidiary or another company is in administration or receivership.
9
The subsidiary is not to be regarded, by reason only of anything done as a consequence of the company concerned being in administration or receivership, as having ceased to be a company in relation to which the conditions in sub-paragraph (2) are met if—
a
the entry into administration or receivership, and
b
everything done as a consequence of the company concerned being in administration or receivership,
is for commercial reasons and is not part of a scheme or arrangement the main purpose (or one of the main purposes) of which is the avoidance of tax.