Part 6

Venture capital trusts
Chapter 4

Qualifying holdings

Definitions

Meaning of “qualifying 90% subsidiary”
301
1
For the purposes of this Chapter, a company (“the subsidiary”) is a qualifying 90% subsidiary of the relevant company at any time when the following conditions are met—
a
the relevant company possesses at least 90% of the issued share capital of, and at least 90% of the voting power in, the subsidiary,
b
the relevant company would—
i
in the event of a winding up of the subsidiary, or
ii
in any other circumstances,
be beneficially entitled to receive at least 90% of the assets of the subsidiary which would then be available for distribution to equity holders of the subsidiary,
c
the relevant company is beneficially entitled to receive at least 90% of any profits of the subsidiary which are available for distribution to equity holders of the subsidiary,
d
no person other than the relevant company has control of the subsidiary, and
e
no arrangements are in existence by virtue of which any of the conditions in paragraphs (a) to (d) would cease to be met.
2
Subsections (3), (4) and (5) of section 302 apply in relation to the conditions in subsection (1)—
a
as they apply in relation to the conditions in subsection (2) of that section, but
b
with the omission from subsection (5) of “or (as the case may be) by another subsidiary of that company”.
3
For the purposes of subsection (1)—
a
the persons who are equity holders of the subsidiary, and
b
the percentage of the assets of the subsidiary to which an equity holder would be entitled,
are to be determined in accordance with paragraphs 1 and 3 of Schedule 18 to ICTA.
4
In making that determination—
a
references in paragraph 3 of that Schedule to the first company are to be read as references to an equity holder, and
b
references in that paragraph to a winding up are to be read as including references to any other circumstances in which assets of the subsidiary are available for distribution to its equity holders.