Section 473 — Corporation Tax Act 2009: Meaning of “major interest”

Meaning of “major interest” 473 1 In this Part references to a company (“A”) having a major interest in another company (“B”) are to be read as follows.

2 A has a major interest in B at any time if at that time—

a A and one other person (“C”), taken together, have control of B, and b A and C each have interests, rights and powers representing at least 40% of the holdings, rights and powers as a result of which A and C are taken to have control of B.

3 The reference in subsection (2)(b) to interests, rights and powers does not include interests, rights or powers arising from shares held by a company if—

a a profit on a sale of the shares would be treated as a trading receipt of a trade carried on by the company, and b the shares are not assets held by an insurance company for the purposes of its long-term business .

4 Section 474 makes provision about how this section operates where connected companies or partnerships are involved.

5 For the purposes of this section and section 474, a company (“D”) is connected with another company (“E”) if—

a D controls E, b E controls D, or c D and E are both controlled by the same company.

6 Section 472 (meaning of “control”) applies for the purposes of this section and section 474.

7 If two or more persons taken together have the power mentioned in section 472(2) (as read with the other provisions of section 472) as respects the affairs of a company (“B”), they are taken for the purposes of subsection (2)(a) to have control of B.