Finance Act 2004

9 U.K. In section 308 of the Taxes Act 1988 (application to subsidiaries)—

(a) in subsection (1)(a), omit the words from “and, except” to “relevant period”,

(b) in subsection (2)—

(i) omit paragraphs (a) to (c),

(ii) before paragraph (d) insert—

“(ca) that more than 50 per cent. of the ordinary share capital of the subsidiary is owned directly or indirectly by the qualifying company;”,

(iii) in paragraph (e), for “the conditions in paragraphs (a) to” substitute “ either of the conditions in paragraphs (ca) and ”, and for “could” substitute “ would ”,

(c) in the opening words of subsection (3), for “the qualifying company” substitute “ any other company ”,

(d) in subsection (3)(a)—

(i) omit “it is shown that”,

(ii) for “and not” substitute “ and is not ”,

(e) omit subsection (3)(b) and the word “and” immediately preceding it,

(f) after subsection (3) insert—

“(3A) The conditions shall not be regarded as ceasing to be satisfied by reason only of anything done as a consequence of the subsidiary or any other company being in administration or receivership 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 bona fide commercial reasons and is not part of a scheme or arrangement the main purpose of which or one of the main purposes of which is the avoidance of tax.”,

(g) in subsection (4)—

(i) after “only of” insert “ arrangements being in existence for ”,

(ii) omit “within the relevant period”,

(iii) omit “it is shown that”,

(iv) after “disposal is” insert “ to be ”,

(v) for “and not” substitute “ and is not to be ”,

(h) omit subsection (5),

(i) after subsection (5A) insert—

“(5B) Subsections (2) to (10) of section 838 apply for the purposes of subsection (2)(ca) above as they apply for the purposes of subsection (1) of that section.”.