Finance Act 2001

Joint enterprise companies: relevant connection

7 After paragraph 23 (qualifying shareholdings in joint venture companies) add—

“Joint enterprise companies: relevant connection

24 (1) This Schedule has effect subject to sub-paragraph (5) below in any case where a company (“the investing company”) has a qualifying shareholding in a joint enterprise company.

(2) For the purposes of this paragraph, 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.

(3) For the purposes of sub-paragraph (2) above the shareholdings of members of a group of companies shall be treated as held by a single company.

(4) For the purposes of this paragraph a company has a “qualifying shareholding” in a joint enterprise company if—

(a) it holds more than 30% of the ordinary share capital of the joint enterprise company, or

(b) it is a member of a group of companies, it holds ordinary share capital of the joint enterprise company and the members of the group between them hold more than 30% of that share capital.

(5) The following shall be treated as having a relevant connection with each other—

(a) the investing company;

(b) the joint enterprise company;

(c) any company having a relevant connection with the investing company;

(d) any company having a relevant connection with the joint enterprise company by virtue of being—

(i) a 51 per cent subsidiary of that company, or

(ii) a member of the same commercial association of companies.

(6) For the purposes of this paragraph “ordinary share capital” has the meaning given by section 832(1) of the Taxes Act.”.