Section 712 — Corporation Tax Act 2010: Meaning of “a major change in the nature or conduct of a trade or business”

Meaning of “a major change in the nature or conduct of a trade or business” 712 1 This section applies for the purposes of section 711(4). 2 “ A major change in the nature or conduct of a trade or business ” includes—

a a major change in the type of property dealt in, or services or facilities provided, in the trade or business, b a major change in customers, outlets or markets of the trade or business, c a change by which the company ceases to be a trading company and becomes an investment company, d a change by which the company ceases to be an investment company and becomes a trading company, and e if the company is an investment company, a major change in the nature of the investments held by the company.

3 Any reference in subsection (2) to a change includes a change which is achieved gradually as a result of a series of transfers.

4 In this section “ trading company ” means a company whose business consists wholly or mainly in the carrying on of a trade or trades.

5 For the purposes of this section, a company is an investment company if—

a its business consists wholly or mainly in the making of investments, and b the principal part of its income is derived from investments.

6 But a company is not an investment company if its business consists wholly or mainly in the holding of shares or securities of companies—

a which are its 90% subsidiaries, and b which are trading companies.