CTM81240 - Groups: surrender of ACT: definition
of subsidiary
ICTA88/S240 (10) to (13)
For the purposes of ICTA88/S240 a company resident in the UK is
a subsidiary of another company if it is a body corporate which
satisfies all the conditions at (a), (b), (c) and (d) below.
- It qualifies as a 51% subsidiary as defined in ICTA88/S838
except that the other company is treated as not being the
owner:
- of any share capital which it owns
directly in a body corporate, if a profit on the sale of the shares
would be treated as a trading receipt of its trade,
or
- of any share capital which it owns
indirectly, and which is owned directly by a body corporate for
which a profit on the sale of the shares would be a trading
receipt,
or
- of any share capital which it owns
directly or indirectly in a body corporate not resident in the
UK.
There is guidance at
CTM36125 on the beneficial ownership of
shares where the company holding the shares is being wound up.
- No arrangements are in existence by virtue of which any person
has, or could obtain, control of the subsidiary company but not of
the parent company.
- The parent company is beneficially entitled to more than 50% of
any profits available for distribution to equity holders of the
subsidiary company.
- The parent company would be beneficially entitled to more than
50% of any assets of the subsidiary company available for
distribution to its equity holders on a winding-up.
