4.—(1) In this Schedule “the qualifying activities condition” means a condition to the effect that–
(a)where a society holds 5% or more of the issued shares or corresponding membership rights in a body and becomes aware that any subordinate organisation of that body is, for the time being, within the prohibited range, the society shall, as soon as it is conveniently practicable to do so without undue loss, dispose of sufficient of its shares or corresponding membership rights so that it ceases to hold 5% or more of the issued shares or corresponding membership rights in that body,
(b)within four months after the end of each financial year of a body in which the society, at such financial year end, holds 15% or more of the issued shares or corresponding membership rights, the society shall satisfy itself whether, for such financial year, at least 60% of the gross income of that body, or if the body has any subordinate organisations, at least 60% of the consolidated gross income of the body and such subordinate organisations, is derived from carrying on qualifying activities, and
(c)if, for two successive financial years of a body less than 60% of the gross income (or, if appropriate, consolidated gross income) is derived from carrying on qualifying activities, the society shall, as soon as it is conveniently practicable to do so without undue loss, dispose of sufficient of its shares or corresponding membership rights so that it ceases to hold 15% or more of the issued shares or corresponding membership rights in that body.
(2) For the purposes of sub–paragraph (1)(a) above, a body corporate comes within the prohibited range where it comes within a description in paragraph 6(2)(a) or (b) below.
(3) For the purposes of this paragraph “qualifying activities” means activities for the purpose of which a society has power to invest in or support a qualifying body. However activities which are qualifying activities only if they are undertaken together with estate agency work shall not be qualifying activities unless they are undertaken by an estate agency body.