SCHEDULE 3Corporation tax: the non-corporate distribution rate: supplementary provisions
Part 3Other supplementary provisions
Definition of a group
14
(1)
For the purposes of section 13AB and this Schedule a company and all its 51% subsidiaries form a group, and if any of those subsidiaries have 51% subsidiaries the group includes them and their 51% subsidiaries, and so on.
(2)
The question whether a company is a 51% subsidiary shall be determined in accordance with section 838, subject to the following provisions.
(3)
A company (“company A”) shall be treated for the purposes of this Schedule as if it were a 51% subsidiary of another company (“company B”) if company B has rights to, or in fact receives, more than 50% of the distributions made by company A.
(4)
For the purposes of this paragraph a company shall be treated as not being the owner—
(a)
of any share capital that it owns directly if a profit on the sale of the shares would be treated as a trading receipt of its trade, or
(b)
of any share capital that it owns indirectly and that is owned directly by a body corporate for which a profit on the sale of the shares would be treated as a trading receipt of its trade.