It is possible for a qualifying change in ownership to occur
without any true change in the economic ownership of the lessor
company – company A.
Example
The principal company of A Ltd is C Ltd. Shares in A Ltd are
sold by B Ltd to D Ltd. A Ltd ceases to be a 75% subsidiary of B
Ltd. This is a relevant change in the relationship between A Ltd
and C Ltd. However it is clear that A Ltd has not ‘changed
hands’: it remains in the group.
FA06/SCH10/PARA13 10 offers an exception in the case of
intra-group reorganizations so that there is no qualifying change
of ownership. The exception applies when every company involved in
the chain of ownership running from company A to the principal
company remains a qualifying 75% subsidiary of the principal
company at the end of the day.
In this example A Ltd B Ltd and D Ltd remain 75% subsidiaries
of the principal company. For this exception to apply the
relationship tested is that between each company and the principal
company. A chain of 75% subsidiaries will not suffice for these
purposes.
