CTM80160 - Groups: group relief: qualifying tests: application of

The guidance in CTM80155 about the qualifying tests applies in principle to all relationships for group claims. But you will not normally need to examine in detail an uncomplicated group situation. This is the situation where:

• the subsidiary company has only one class of issued share capital which does not carry any unusual rights, and
• any loans are clearly 'normal commercial loans' (see CTM81010).

Where you do need to make a detailed examination, you will usually have to refer to the documents regulating the company and its share capital. You will need to examine:

• the Memorandum and Articles of Association,
• special resolutions concerning alterations in share capital, and
• documents relating to loans made to the company,

so that you can determine different equity holders' entitlements to:

• profits, or
• assets in a winding-up.