Section 724 — Corporation Tax Act 2010: Disregard of change in company ownership

Disregard of change in company ownership 724 1 A change in the ownership of a company (“the subsidiary company”) is disregarded for the purposes of Chapters 2 to 6 if —

a immediately before the change in ownership, the subsidiary company is a qualifying 75% subsidiary of another company (“the parent company”),

and b although there is a change in the direct ownership of the subsidiary company, the subsidiary company continues after the change to be a qualifying 75% subsidiary of the parent company.

2 For the purposes of this section, the subsidiary company is a qualifying 75% subsidiary of the parent company if conditions A, B and C are met.

3 Condition A is that the subsidiary company is a 75% subsidiary of the parent company.

4 Condition B is that the parent company would be beneficially entitled to at least 75% of any profits available for distribution to equity holders of the subsidiary company.

5 Condition C is that the parent company 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.

6 Chapter 6 of Part 5 (equity holders and profits or assets available for distribution) applies for the purposes of subsections (4) and (5) as it applies for the purposes of section 151(4)(a) and (b).