Part XXIX Interpretation

F1421AF1Meaning of “participating interest”

1

In section 421 a “participating interest” means an interest held by an undertaking in the shares of another undertaking which it holds on a long-term basis for the purpose of securing a contribution to its activities by the exercise of control or influence arising from or related to that interest.

2

A holding of 20% or more of the shares of an undertaking is presumed to be a participating interest unless the contrary is shown.

3

The reference in subsection (1) to an interest in shares includes—

a

an interest which is convertible into an interest in shares, and

b

an option to acquire shares or any such interest;

and an interest or option falls within paragraph (a) or (b) notwithstanding that the shares to which it relates are, until the conversion or the exercise of the option, unissued.

4

For the purposes of this section an interest held on behalf of an undertaking shall be treated as held by it.

5

In this section “undertaking” has the same meaning as in the Companies Acts (see section 1161(1) of the Companies Act 2006).