CG17952a - Taper relief: joint venture enterprises - relevant connection: Taper relief does not apply to disposals before 6 April 1998 or after 6 April 2008

From 6 April 2000 TCGA92/SCHA1/PARA24 provides that one company may have a relevant connection with another where they are members of the same joint enterprise of companies. TCGA92/SchA1/PARA6, see CG17948, explains when a company is a qualifying company in relation to individuals and the trustees of a settlement. It may be necessary to consider when a company has a relevant connection with another to decide if shares in a company are at any time business assets. Paragraph 24 extends the meaning of relevant connection in the case of joint enterprise companies. CG17953 explains when one company may have a relevant connection with another.

From 6 April 2000 to 16 April 2002 

A company is a joint enterprise company if, and only if, 75% or more of its ordinary share capital (in aggregate) is held by not more than five companies. Shareholdings of members of groups are treated as held by a single company.

A company has a qualifying shareholding in a joint enterprise company if it holds more than 30% of the ordinary share capital of the joint enterprise company, or it is a member of a group of companies and it holds ordinary shares in the joint enterprise company and the members of the group between them hold more than 30% of that share capital.

For periods from 17 April 2002 

The requirement is that 75% of the ordinary share capital must be held by not more than 5 or fewer persons (previously this rule related to companies).

A qualifying shareholding is a holding of more than 10% (previously 30%)of the ordinary share capital of the joint enterprise company.

For all periods from 6 April 2000 

The following will have a relevant connection with each other:

• the investing company;
• the joint enterprise company;
• any company having a relevant connection with the investing company; and
• a 51% subsidiary or a member of the same commercial association of companies of the joint enterprise company