Part 6Venture capital trusts

Chapter 4Qualifying holdings

Excluded activities

310Excluded activities: provision of services or facilities for another business

1

Providing services or facilities for a business carried on by another person (other than a company of which the provider of the services or facilities is a qualifying subsidiary) is an excluded activity if—

a

the business consists wholly or as to a substantial part of activities falling within any of paragraphs (a) to (k) of section 303(1), and

b

a controlling interest in the business is held by a person who also has a controlling interest in the business carried on by the provider of the services or facilities.

2

Subsections (3) to (5) explain what is meant by a controlling interest in a business for the purposes of subsection (1)(b).

3

In the case of a business carried on by a company, a person (“A”) has a controlling interest in the business if—

a

A controls the company,

b

the company is a close company and A or an associate of A, being a director of the company, either—

i

is the beneficial owner of more than 30% of the ordinary share capital of the company, or

ii

is able, directly or through the medium of other companies or by any other indirect means, to control more than 30% of that share capital, or

c

at least half the business could, in accordance with section 344(2) of ICTA (persons to whom company's trade may be treated as belonging), be regarded as belonging to A for the purposes of section 343 of that Act (company reconstructions without a change of ownership).

4

In any other case, a person has a controlling interest in a business if the person is entitled to at least half the assets used for, or of the income arising from, the business.

5

For the purposes of this section—

a

any rights or powers of a person who is an associate of another are to be attributed to that other person, and

b

“business” includes any trade, profession or vocation.