[F118MInterpretation of section 18L(3)U.K.
(1)This section applies for the purposes of section 18L(3).
(2)In addition to meeting the requirements of section 1154(2), a company (“A”) is a 51% subsidiary of another company (“B”) only at times when—
(a)B would be beneficially entitled to more than 50% of any profits available for distribution to equity holders of A, and
(b)B would be beneficially entitled to more than 50% of any assets of A available for distribution to its equity holders on a winding up.
(3)In determining whether or not a company is a 51% subsidiary of another company (“C”), C is treated as not owning share capital if—
(a)it owns the share capital indirectly,
(b)the share capital is owned directly by a company (“D”), and
(c)a profit on the sale of the shares would be a trading receipt for D.
(4)A company is a “trading company” if its business consists wholly or mainly of carrying on one or more trades.
(5)A company is a “relevant holding company” if its business consists wholly or mainly of holding shares in or securities of trading companies (as defined by subsection (4)) that are its 90% subsidiaries.
(6)A company is a “quasi-subsidiary” of R if—
(a)it is owned by a consortium of which R is a member,
(b)it is not a 75% subsidiary of any company, and
(c)no arrangements of any kind (whether in writing or not) exist as a result of which it could become a 75% subsidiary of any company.
(7)A company is owned by a consortium if at least 75% of the company's ordinary share capital is beneficially owned by two or more companies each of which—
(a)beneficially owns at least 5% of that capital,
(b)would be beneficially entitled to at least 5% of any profits available for distribution to equity holders of the company, and
(c)would be beneficially entitled to at least 5% of any asset of the company available for distribution to its equity holders on a winding up.
(8)The companies meeting those conditions are called the members of the consortium.
(9)Chapter 6 of Part 5 (equity holders and profits or assets available for distribution) applies for the purposes of this section as it applies for the purposes of section 151(4)(a) and (b).]
Textual Amendments
F1Pt. 3A inserted (with effect in accordance with Sch. 1 para. 34 of the amending Act) by Finance Act 2021 (c. 26), Sch. 1 para. 3