CTM80155 - Groups: group relief: qualifying tests

ICTA88/S413(7), ICTA88/SCH18

For its subsidiary to qualify as a 75% subsidiary for group relief purposes the parent company must:

  • hold not less than 75% of the subsidiary company's ordinary share capital as defined in ICTA88/S832, and in addition,
  • have a beneficial entitlement to not less than 75% of:
    • any profits available for distribution to equity holders (CTM81010) of the subsidiary company, and
    • any assets of the subsidiary company which would be available for distribution to its equity holders on a winding-up.

The detailed rules on these qualifying tests are in ICTA88/SCH18. You should apply these rules in line with CTM81000 onwards.

Where these provisions interrupt a group relationship during an accounting period, the rules in ICTA88/S403A (CTM80215) apply.