Section 139 — Income Tax Act 2007: The control and independence requirement

The control and independence requirement 139 1 The control element of the requirement is that—

a the company must not control (whether on its own or together with any person connected with it) any company which is not a qualifying subsidiary of the company, and b no arrangements must be in existence by virtue of which the company could fail to meet paragraph (a) (whether at a time during the continuous period that is relevant for the purposes of section 134(3) or otherwise).

2 The independence element of the requirement is that—

a the company must not—

i be a 51% subsidiary of another company, or ii be under the control of another company (or of another company and any other person connected with that other company), without being a 51% subsidiary of that other company, and b no arrangements must be in existence by virtue of which the company could fail to meet paragraph (a) (whether at a time during the continuous period that is relevant for the purposes of section 134(3) or otherwise).

3 This section is subject to section 145(3).

4 In this section— “ arrangements ” includes any scheme, agreement or understanding, whether or not legally enforceable, “control”, in subsection (1)(a), is to be read in accordance with sections 450 and 451 of CTA 2010 , “ qualifying subsidiary ” is to be read in accordance with section 191.