Section 398 — Corporation Tax Act 2010: “Qualifying 75% ... subsidiary” etc

“Qualifying 75% ... subsidiary” etc 398 1 For the purposes of the sales of lessors Chapters, a company (“the subsidiary company”) is a qualifying 75% subsidiary of another company (“the parent company”) if condition A or B is met and condition C is met.

2 Condition A is that—

a the subsidiary company has ordinary share capital, and b the subsidiary company is a 75% subsidiary of the parent company.

3 Condition B is that—

a the subsidiary company does not have ordinary share capital, and b the parent company has control of the subsidiary company.

4 Condition C is that the parent company—

a is beneficially entitled to at least 75% of any profits available for distribution to equity holders of the subsidiary company, and b would be beneficially entitled to at least 75% of any assets of the subsidiary company available for distribution to its equity holders on a winding up. 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 Chapter 6 of Part 5 (equity holders and profits or assets available for distribution)—

a applies for the purposes of section 394(3)(b) and (c) (including that section as applied for the purposes of section 406(5)) and of section 405(5)(b) and (c) as that Chapter applies for the purposes of section 143(3)(b) and (c) (condition 1: surrendering company owned by consortium) and section 144(3)(b) and (c) (condition 1: claimant company owned by consortium),

and b applies for the purposes of subsection (4)(a) and (b) as that Chapter applies for the purposes of section 151(4)(a) and (b) (meaning of “ 75% subsidiary ” ...).

8 But in a case where the subsidiary company does not have ordinary share capital, Chapter 6 of Part 5 applies for those purposes as if the members of that company were equity holders of that company for the purposes of that Chapter.