Corporation Tax Act 2010

1162 The 15% holding limit: exceptions

(1) In condition E the reference to a holding in a company does not include a holding in—

(a) an investment trust, or

(b) a company that would qualify as an investment trust but for condition B (listing in the official UK list).

(2) Subsection (3) applies if a company has a holding in a company and immediately after—

(a) the time when the holding was acquired (if it has not been enlarged), or

(b) the most recent time when the holding was enlarged,

the holding represented 15% or less by value of the investing company’s investments.

(3) For the purposes of condition E the holding is treated as continuing to represent 15% or less by value of the investing company’s investments until the holding is next enlarged.

(4) Subsection (5) applies if—

(a) a company disposes of shares or securities from a holding it has in a company,

(b) immediately before the disposal the holding represents more than 15% by value of the investing company’s investments, and

(c) immediately after the disposal the holding represents 15% or less by value of the investing company’s investments.

(5) For the purpose of determining whether the investing company meets condition E in accounting periods later than that in which the disposal was made, the holding is treated (if it does not already fall to be so treated under subsection (3)) as continuing to represent 15% or less by value of the investing company’s investments until the holding is next enlarged.

(6) If a holding which a company has in another company—

(a) was acquired before 6 April 1965, and

(b) on 6 April 1965 represented 25% or less by value of the investing company’s investments,

condition E does not apply to the holding so long as it is not enlarged.