Section 949 — Corporation Tax Act 2010: Dual resident investing companies

Dual resident investing companies 949 1 Section 948(1) to (4) does not apply if the successor is a dual resident investing company in the transfer accounting period.

2 A company is a “dual resident investing company” in the transfer accounting period if the company—

a is a dual resident company in that period (see subsection (3)),

and b meets condition A, B or C (see subsections (4) to (6)).

3 A “dual resident company” is a company that is both UK resident and also within a charge to non-UK tax under the law of a territory because—

a it derives its status as a company from that law, b its place of management is in that territory, or c it is for some other reason treated under that law as resident in that territory for the purposes of that tax.

4 Condition A is that the successor is not a trading company throughout the transfer accounting period.

5 Condition B is that in the transfer accounting period the successor carries on a trade of such a description that the company's main function, or one of its main functions, consists of one or more of the following activities. Activity 1 Acquiring and holding shares, securities or investments of any other kind (whether directly or indirectly). Activity 2 Making, under loan relationships, payments in relation to which debits fall to be brought into account for the purposes of Part 5 of CTA 2009. Activity 3 Making payments which are qualifying charitable donations. Activity 4 Making payments similar to those within Activity 3 but which are deductible in calculating the profits of the successor for corporation tax purposes. Activity 5 Obtaining funds for the purposes of, or otherwise in connection with, any of Activities 1 to 4.

6 Condition C is that in the transfer accounting period the successor carries on one or more of Activities 1 to 5—

a to an extent that does not appear to be justified by any trade which it carries on, or b for a purpose that does not appear to be appropriate to any such trade.

7 In this section— “ non-UK tax ” has the same meaning as in Part 5 (see section 187), “ trading company ” means a company the business of which consists wholly or mainly in the carrying on of a trade or trades, and “ the transfer accounting period ” means the accounting period of the successor in which the transfer of the transferred trade takes place.