12(1)A company (“company E”) is a principal company of company A if—U.K.
(a)company A is owned by a consortium of which company E is a member, or
(b)company A is a qualifying 90% subsidiary of a company owned by a consortium of which company E is a member,
and company E is not a qualifying 75% subsidiary of another company.
(2)There is a relevant change in the relationship between company A and company E (as a principal company) on any day if the relevant fraction at the end of the day is less than the relevant fraction at the start of the day.
(3)In this paragraph “the relevant fraction” is whichever is the lowest of the following percentages—
(a)the percentage of the ordinary share capital of company A that is beneficially owned by company E,
(b)the percentage to which company E is beneficially entitled of any profits available for distribution to equity holders of company A,
(c)the percentage to which company E would be beneficially entitled of any assets of company A available for distribution to its equity holders on a winding-up.
(4)In any case where company A is a qualifying 90% subsidiary of a company, sub-paragraph (3) is to be read as if for references to company A there were substituted references to that company.
(5)A company (“company F”) is a principal company of company A if—
(a)company A is owned by a consortium of which company E is a member, or
(b)company A is a qualifying 90% subsidiary of a company owned by a consortium of which company E is a member,
and company E is a qualifying 75% subsidiary of company F, but company F is not a qualifying 75% subsidiary of another company.
(6)There is a relevant change in the relationship between company A and company F (as a principal company) on any day if—
(a)the relevant fraction at the end of the day is less than the relevant fraction at the start of the day, or
(b)company E ceases to be a qualifying 75% subsidiary of company F on that day.
(7)If company F is a qualifying 75% subsidiary of another company (“company G”), company G is a principal company of company A unless company G is a qualifying 75% subsidiary of another company, and so on.
(8)Accordingly, there is a relevant change in the relationship between company A and a principal company of company A on any day if—
(a)in determining which company is a principal company, regard is had to any company which is a qualifying 75% subsidiary of another, and
(b)that company ceases to be a qualifying 75% subsidiary of the other on that day,
(as well as if the relevant fraction at the end of the day is less than the relevant fraction at the start of the day).
(9)This paragraph is supplemented by—
(a)paragraph 14 (meaning of consortium member etc), and
(b)paragraph 15 (meaning of a qualifying 75% or 90% subsidiary).