Section 151 — Corporation Tax Act 2010: Meaning of “75% subsidiary” and “90% subsidiary”

Meaning of “75% subsidiary” and “90% subsidiary” 151 1 In this Part “75% subsidiary” and “90% subsidiary” are to be read in accordance with Chapter 3 of Part 24, but subject to subsections (2) to (4).

2 In applying the definition of “75% subsidiary” in section 1154(3), share capital of a registered society is to be treated as if it were ordinary share capital.

3 If—

a a company (“the shareholder”) directly owns shares in another company, and b a profit on the sale of those shares would be a trading receipt of the shareholder, the shareholder is treated as not being the owner of those shares for the purpose of determining if any company is a 75% subsidiary of any other company.

4 If a company (“the subsidiary”) would, apart from this subsection, be treated as a 75% or 90% subsidiary of another company (“the parent”) at any time, the subsidiary is not to be so treated unless at that time the parent—

a is beneficially entitled to at least 75% or 90% (as the case may be) of any profits available for distribution to equity holders of the subsidiary (see Chapter 6),

and b would be beneficially entitled to at least 75% or 90% (as the case may be) of any assets of the subsidiary available for distribution to such equity holders on a winding up (see Chapter 6).