SCHEDULES
SCHEDULE 5Enterprise management incentives
Part 3Qualifying companies
The trading activities requirement: parent company
14
1
The trading activities requirement in the case of a parent company is that—
a
at least one group company—
i
disregarding any purposes within sub-paragraph (4), exists wholly for the purpose of carrying on one or more qualifying trades, and
ii
is carrying on a qualifying trade or preparing to do so, and
b
the business of the group does not consist (either wholly or as to a substantial part) in the carrying on of non-qualifying activities.
2
The “business of the group” means what would be the business of the group if the activities of the group companies taken together were regarded as one business.
3
For the purpose of determining the business of a group, activities of a group company are to be disregarded to the extent that they consist in—
a
the holding of shares in or securities of, or the making of loans to, another group company,
b
the holding and managing of property used by a group company for the purposes of one or more qualifying trades carried on by a group company, or
c
incidental activities of a company which meets the trading activities requirement for a single company (see paragraph 13).
4
The purposes referred to in sub-paragraph (1)(a)(i) are—
a
the carrying on of any activities within sub-paragraph (3), and
b
any purposes having no significant effect (other than in relation to incidental matters) on the extent of the company’s activities.
5
In this paragraph—
a
“group company” means any member of the group;
b
“incidental activities” means activities carried on in pursuance of purposes having no significant effect (other than in relation to incidental matters) on the extent of the company’s activities;
c
“non-qualifying activities” means—
i
excluded activities, or
ii
activities carried on otherwise than in the course of a trade.
6
This paragraph is supplemented by paragraph 15 (meaning of “qualifying trade”) read with paragraphs 16 to 23 (excluded activities).