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Corporation Tax Act 2010, Section 18M is up to date with all changes known to be in force on or before 13 January 2025. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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(1)This section applies for the purposes of section 18L(3).
(2)In addition to meeting the requirements of section 1154(2), a company (“A”) is a 51% subsidiary of another company (“B”) only at times when—
(a)B would be beneficially entitled to more than 50% of any profits available for distribution to equity holders of A, and
(b)B would be beneficially entitled to more than 50% of any assets of A available for distribution to its equity holders on a winding up.
(3)In determining whether or not a company is a 51% subsidiary of another company (“C”), C is treated as not owning share capital if—
(a)it owns the share capital indirectly,
(b)the share capital is owned directly by a company (“D”), and
(c)a profit on the sale of the shares would be a trading receipt for D.
(4)A company is a “trading company” if its business consists wholly or mainly of carrying on one or more trades.
(5)A company is a “relevant holding company” if its business consists wholly or mainly of holding shares in or securities of trading companies (as defined by subsection (4)) that are its 90% subsidiaries.
(6)A company is a “quasi-subsidiary” of R if—
(a)it is owned by a consortium of which R is a member,
(b)it is not a 75% subsidiary of any company, and
(c)no arrangements of any kind (whether in writing or not) exist as a result of which it could become a 75% subsidiary of any company.
(7)A company is owned by a consortium if at least 75% of the company's ordinary share capital is beneficially owned by two or more companies each of which—
(a)beneficially owns at least 5% of that capital,
(b)would be beneficially entitled to at least 5% of any profits available for distribution to equity holders of the company, and
(c)would be beneficially entitled to at least 5% of any asset of the company available for distribution to its equity holders on a winding up.
(8)The companies meeting those conditions are called the members of the consortium.
(9)Chapter 6 of Part 5 (equity holders and profits or assets available for distribution) applies for the purposes of this section as it applies for the purposes of section 151(4)(a) and (b).]
Textual Amendments
F1Pt. 3A inserted (with effect in accordance with Sch. 1 para. 34 of the amending Act) by Finance Act 2021 (c. 26), Sch. 1 para. 3
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