Companies Act 2006

834 Investment company: condition as to holdings in other companies U.K.

(1) The condition referred to in section 833(2)(b) (requirements to be complied with by investment company) is that none of the company's holdings in companies (other than those that are for the time being investment companies) represents more than 15% by value of the company's investments.

(2) For this purpose—

(a) holdings in companies that—

(i) are members of a group (whether or not including the investing company), and

(ii) are not for the time being investment companies,

are treated as holdings in a single company; and

(b) where the investing company is a member of a group, money owed to it by another member of the group—

(i) is treated as a security of the latter held by the investing company, and

(ii) is accordingly treated as, or as part of, the holding of the investing company in the company owing the money.

(3) The condition does not apply—

(a) to a holding in a company acquired before 6th April 1965 that on that date represented not more than 25% by value of the investing company's investments, or

(b) to a holding in a company that, when it was acquired, represented not more than 15% by value of the investing company's investments,

so long as no addition is made to the holding.

(4) For the purposes of subsection (3)—

(a) “holding” means the shares or securities (whether or one class or more than one class) held in any one company;

(b) an addition is made to a holding whenever the investing company acquires shares or securities of that one company, otherwise than by being allotted shares or securities without becoming liable to give any consideration, and if an addition is made to a holding that holding is acquired when the addition or latest addition is made to the holding; and

(c) where in connection with a scheme of reconstruction a company issues shares or securities to persons holding shares or securities in a second company in respect of and in proportion to (or as nearly as may be in proportion to) their holdings in the second company, without those persons becoming liable to give any consideration, a holding of the shares or securities in the second company and a corresponding holding of the shares or securities so issued shall be regarded as the same holding.

(5) In this section—

• “company” and “shares” shall be construed in accordance with sections 99 and 288 of the Taxation of Chargeable Gains Act 1992 (c. 12);

• “group” means a company and all companies that are its 51% subsidiaries (within the meaning of section 838 of the Income and Corporation Taxes Act 1988 (c. 1)); and

• “scheme of reconstruction” has the same meaning as in section 136 of the Taxation of Chargeable Gains Act 1992.

Commencement Information

I1 S. 834 wholly in force at 6.4.2008; s. 834 not in force at Royal Assent see s. 1300; s. 834 in force at 6.4.2008 by S.I. 2007/3495, art. 3(1)(k) (with savings in arts. 7, 12 and subject to transitional adaptations in Sch. 1 paras. 14-20 and with savings in Sch. 4 paras. 33-35)