Finance Act 2006

Qualifying 75% subsidiaries

11 (1) A company (“company B”) is a principal company of company A if—

(a) company A is a qualifying 75% subsidiary of company B, and

(b) company B is not a qualifying 75% subsidiary of another company.

(2) There is a relevant change in the relationship between company A and company B (as a principal company) on any day if company A ceases to be a qualifying 75% subsidiary of company B on that day.

(3) A company (“company C”) is a principal company of company A if—

(a) company A is a qualifying 75% subsidiary of company B,

(b) company B is a qualifying 75% subsidiary of company C, and

(c) company C is not a qualifying 75% subsidiary of another company.

(4) There is a relevant change in the relationship between company A and company C (as a principal company) on any day if—

(a) company A ceases to be a qualifying 75% subsidiary of company B on that day, or

(b) company B ceases to be a qualifying 75% subsidiary of company C on that day.

(5) If company C is a qualifying 75% subsidiary of another company (“company D”), company D is a principal company of company A unless company D is a qualifying 75% subsidiary of another company, and so on.

(6) Accordingly, there is a relevant change in the relationship between company A and a principal company of company A on any day if—

(a) in determining which company is a principal company, regard is had to any company which is a qualifying 75% subsidiary of another, and

(b) that company ceases to be a qualifying 75% subsidiary of the other on that day.

(7) This paragraph is supplemented by paragraph 15 (meaning of a qualifying 75% subsidiary).