C1Part 4Loss relief

Annotations:
Modifications etc. (not altering text)
C1

Pt. 4 modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Risk Transformation (Tax) Regulations 2017 (S.I. 2017/1271), regs. 1(1), 10

Chapter 5Losses on disposal of shares

Qualifying trading companies: the requirements

81The control and independence requirement

1

The control element of the requirement is that—

a

the company must not control (whether on its own or together with any person connected with it) any company which is not a qualifying subsidiary of the company, and

b

no arrangements must be in existence by virtue of which the company could fail to meet paragraph (a) (whether at a time during the continuous period that is relevant for the purposes of section 78(3) or otherwise).

2

The independence element of the requirement is that—

a

the company must not—

i

be a 51% subsidiary of another company, or

ii

be under the control of another company (or of another company and any other person connected with that other company), without being a 51% subsidiary of that other company, and

b

no arrangements must be in existence by virtue of which the company could fail to meet paragraph (a) (whether at a time during the continuous period that is relevant for the purposes of section 78(3) or otherwise).

3

This section is subject to section 87(3).

4

In this section—

  • “arrangements” includes any scheme, agreement or understanding (whether or not legally enforceable),

  • “control”, in subsection (1)(a), is to be read in accordance with sections 450 and 451 (but see section 1124 for the meaning of “control” in subsection (2)(a)(ii)), and

  • “qualifying subsidiary” is to be read in accordance with section 191 of ITA 2007.