|
| |
|
(b) | has ceased to meet any of those requirements at a time which |
| |
is not more than 3 years before that date and has not since |
| |
that time been an excluded company, an investment |
| |
company or a trading company. |
| |
(3) | Condition B is that the company either— |
| 5 |
(a) | has met each of the requirements mentioned in condition A |
| |
for a continuous period of 6 years ending on that date or at |
| |
| |
(b) | has met each of those requirements for a shorter continuous |
| |
period ending on that date or at that time and has not before |
| 10 |
the beginning of that period been an excluded company, an |
| |
investment company or a trading company. |
| |
(4) | Condition C is that the company— |
| |
(a) | met the gross assets requirement (see section 576G) both |
| |
immediately before and immediately after the issue of the |
| 15 |
shares in respect of which the relief is claimed under this |
| |
| |
(b) | met the unquoted status requirement (see section 576H) at |
| |
the relevant time within the meaning of that section. |
| |
(5) | Condition D is that the company has carried on its business wholly |
| 20 |
or mainly in the United Kingdom throughout the period— |
| |
(a) | beginning with the incorporation of the company or, if later, |
| |
12 months before the shares in question were issued, and |
| |
(b) | ending with the date of the disposal.” |
| |
121 | After section 576A insert — |
| 25 |
“Qualifying trading companies: the requirements |
| |
576B | The trading requirement |
| |
(1) | The trading requirement is— |
| |
(a) | that the company, disregarding any incidental purposes, |
| |
exists wholly for the purpose of carrying on one or more |
| 30 |
| |
(b) | that the company is a parent company and that the business |
| |
of the group does not consist wholly or as to a substantial part |
| |
in the carrying on of non-qualifying activities. |
| |
(2) | If the company intends that one or more other companies should |
| 35 |
become its qualifying subsidiaries with a view to their carrying on |
| |
one or more qualifying trades— |
| |
(a) | the company is treated as a parent company for the purposes |
| |
of subsection (1)(b), and |
| |
(b) | the reference in subsection (1)(b) to the group includes the |
| 40 |
company and any existing or future company that will be its |
| |
qualifying subsidiary after the intention in question is carried |
| |
| |
| This subsection does not apply at any time after the abandonment of |
| |
| 45 |
|
| |
|
| |
|
(3) | For the purpose of subsection (1)(b) the business of the group means |
| |
what would be the business of the group if the activities of the group |
| |
companies taken together were regarded as one business. |
| |
(4) | For the purpose of determining the business of a group, activities are |
| |
disregarded to the extent that they are activities carried on by a |
| 5 |
mainly trading subsidiary otherwise than for its main purpose. |
| |
(5) | For the purposes of determining the business of a group, activities of |
| |
a group company are disregarded to the extent that they consist in— |
| |
(a) | the holding of shares in or securities of a qualifying |
| |
subsidiary of the parent company, |
| 10 |
(b) | the making of loans to another group company, |
| |
(c) | the holding and managing of property used by a group |
| |
company for the purpose of one or more qualifying trades |
| |
carried on by a group company, or |
| |
(d) | the holding and managing of property used by a group |
| 15 |
company for the purpose of research and development from |
| |
| |
(i) | that a qualifying trade to be carried on by a group |
| |
company will be derived, or |
| |
(ii) | that a qualifying trade carried on or to be carried on |
| 20 |
by a group company will benefit. |
| |
(6) | Any reference in subsection (5)(d)(i) or (ii) to a group company |
| |
includes a reference to any existing or future company which will be |
| |
a group company at any future time. |
| |
| 25 |
“excluded activities” has the meaning given by section 192 of |
| |
ITA 2007 read with sections 193 to 199 of that Act, |
| |
“group” means a parent company and all its qualifying |
| |
| |
“group company”, in relation to a group, means the parent |
| 30 |
company or any of its qualifying subsidiaries, |
| |
“incidental purposes” means purposes having no significant |
| |
effect (other than in relation to incidental matters) on the |
| |
extent of the activities of the company in question, |
| |
“mainly trading subsidiary” means a subsidiary which, apart |
| 35 |
from incidental purposes, exists wholly for the purpose of |
| |
carrying on one or more qualifying trades, and any reference |
| |
to the main purpose of such a subsidiary is to be read |
| |
| |
“non-qualifying activities” means— |
| 40 |
(a) | excluded activities, and |
| |
(b) | activities (other than research and development) |
| |
carried on otherwise than in the course of a trade, |
| |
“parent company” means a company that has one or more |
| |
| 45 |
“qualifying subsidiary” is to be read in accordance with section |
| |
| |
“qualifying trade” has the meaning given by section 189 of that |
| |
| |
|
| |
|
| |
|
“research and development” has the meaning given by section |
| |
| |
(8) | In sections 189(1)(b) and 194(4)(c) of ITA 2007 (as applied by |
| |
subsection (7) for the purposes of the definitions of “excluded |
| |
activities” and “qualifying trade”) “period B” means the continuous |
| 5 |
period that is relevant for the purposes of section 576A.” |
| |
122 | After section 576B insert— |
| |
“576C | Ceasing to meet the trading requirement because of administration or |
| |
| |
(1) | A company is not regarded as ceasing to meet the trading |
| 10 |
requirement by reason only of anything done in consequence of the |
| |
company or any of its subsidiaries being in administration or |
| |
| |
| This has effect subject to subsections (2) and (3). |
| |
(2) | Subsection (1) applies only if— |
| 15 |
(a) | the entry into administration or receivership, and |
| |
(b) | everything done as a result of the company concerned being |
| |
in administration or receivership, |
| |
| is for genuine commercial reasons, and is not part of a scheme or |
| |
arrangement the main purpose or one of the main purposes of which |
| 20 |
| |
(3) | A company ceases to meet the trading requirement if before the time |
| |
that is relevant for the purposes of section 576A(2)— |
| |
(a) | a resolution is passed, or an order is made, for the winding up |
| |
of the company or any of its subsidiaries (or, in the case of a |
| 25 |
winding up otherwise than under the Insolvency Act 1986 or |
| |
the Insolvency (Northern Ireland) Order 1989, any other act |
| |
is done for the like purpose), or |
| |
(b) | the company or any of its subsidiaries is dissolved without |
| |
| 30 |
| This is subject to subsection (4). |
| |
(4) | Subsection (3) does not apply if — |
| |
(a) | the winding up is for genuine commercial reasons, and is not |
| |
part of a scheme or arrangement the main purpose or one of |
| |
the main purposes of which is the avoidance of tax, and |
| 35 |
(b) | the company continues, during the winding up, to be a |
| |
| |
(5) | References in this section to a company being “in administration” or |
| |
“in receivership” are to be read in accordance with section 252 of ITA |
| |
| 40 |
123 | After section 576C insert— |
| |
“576D | The 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 |
| 45 |
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 576A(3) or otherwise). |
| |
(2) | The independence element of the requirement is that— |
| 5 |
(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% |
| 10 |
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 576A(3) or otherwise). |
| 15 |
(3) | This section is subject to section 576J(3). |
| |
| |
“arrangements” includes any scheme, agreement or |
| |
understanding, whether or not legally enforceable, |
| |
“control” is to be read as follows— |
| 20 |
(a) | in subsection (1)(a), in accordance with section 416(2) |
| |
| |
(b) | in subsection (2)(a), in accordance with section 840, |
| |
“qualifying subsidiary” is to be read in accordance with section |
| |
| 25 |
124 | After section 576D insert— |
| |
“576E | The qualifying subsidiaries requirement |
| |
(1) | The qualifying subsidiaries requirement is that any subsidiary that |
| |
the company has must be a qualifying subsidiary of the company. |
| |
(2) | In this section “qualifying subsidiary” is to be read in accordance |
| 30 |
with section 191 of ITA 2007.” |
| |
125 | After section 576E insert— |
| |
“576F | The property managing subsidiaries requirement |
| |
(1) | The property managing subsidiaries requirement is that any |
| |
property managing subsidiary that the company has must be a |
| 35 |
qualifying 90% subsidiary of the company. |
| |
| |
“property managing subsidiary” has the meaning given by |
| |
section 188(2) of ITA 2007, |
| |
“qualifying 90% subsidiary” has the meaning given by section |
| 40 |
| |
126 | After section 576F insert— |
| |
|
| |
|