Section 269ZZB — Corporation Tax Act 2010: Meaning of “group”

Meaning of “group” 269ZZB 1 In this Part “ group ” means two or more companies which together meet the following condition.

2 The condition is that one of the companies is—

a the ultimate parent of each of the other companies, and b is not the ultimate parent of any other company.

3 A company (“A”) is the “ultimate parent” of another company (“B”) if—

a A is the parent of B, and b no company is the parent of both A and B.

4 A company (“A”) is the “parent” of another company (“B”) if—

a B is a 75% subsidiary of A, b A is beneficially entitled to at least 75% of any profits available for distribution to equity holders of B, or c A would be beneficially entitled to at least 75% of any assets of B available for distribution to its equity holders on a winding up.

5 The following apply for the purposes of subsection (4)—

a Chapter 6 of Part 5 (equity holders and profits or assets available for distribution) other than sections 169 to 182, and b Chapter 3 of Part 24 (subsidiaries). This is subject to subsections (6) and (7).

6 In applying Chapter 3 of Part 24 for the purposes of subsection (4)—

a share capital of a registered society is to be treated as if it were ordinary share capital, and b a company (“the shareholder”) that directly owns shares in another company is to be treated as not owning those shares if a profit on their sale would be a trading receipt of the shareholder.

7 In applying Chapter 6 of Part 5 (other than sections 169 to 182) and Chapter 3 of Part 24 for the purposes of subsection (4), they are to be read with all modifications necessary to ensure that—

a they apply to a company which does not have share capital, and to holders of corresponding ordinary holdings in such a company, in a way which corresponds to the way they apply to companies with ordinary share capital and holders of ordinary shares in such companies, b they apply to a company which is an unincorporated association in a way which corresponds to the way they apply to companies which are bodies corporate, c they apply in relation to ownership through an entity (other than a company), or any trust or other arrangement, in a way which corresponds to the way they apply to ownership through a company, and d for the purposes of achieving paragraphs (a) to (c), profits or assets are attributed to holders of corresponding ordinary holdings in unincorporated associations, entities, trusts or other arrangements in a manner which corresponds to the way profits or assets are attributed to holders of ordinary shares in a company which is a body corporate.

8 In this section “corresponding ordinary holding” in an unincorporated association, entity, trust or other arrangement means a holding or interest which provides the holder with economic rights corresponding to those provided by a holding of ordinary shares in a body corporate 9 For the purposes of the application of this Part in relation to a collective investment vehicle to which paragraph 4 of Schedule 5AAA to TCGA 1992 applies, the reference in paragraph 4(2) of that Schedule to “relevant purposes” is to be treated as including a reference to the purposes of this section.