Income Tax Act 2007

286Qualifying holdings: introductionU.K.

(1)If any shares in or securities of any company (“the relevant company”) are at any time held by another company (“the investing company”), this Chapter applies for determining whether and to what extent those shares or securities (“the relevant holding”) are, for the purposes of Chapter 3, to be regarded as at that time comprised in the investing company's qualifying holdings.

(2)The relevant holding is to be regarded as comprised in the investing company's qualifying holding at any time if—

(a)all the following requirements of this Chapter are met at that time in relation to the relevant company and the relevant holding, F1...

(b)the relevant holding consists of shares or securities which were first issued by the relevant company to the investing company and have been held by the investing company ever since [F2, and

(c)those shares or securities were first issued by the relevant company in order to raise money for the purposes of promoting growth and development of—

(i)if the relevant company is a single company, the business of that company, and

(ii)if it is a parent company, what would be the business of the group if the activities of the group companies taken together were regarded as one business.]

(3)The requirements are those imposed as to—

[F3(1za)risk to capital (see section 286ZA),]

[F4(za)UK permanent establishment (see section 286A),

(zb)financial health (see section 286B),]

(a)maximum qualifying investment (see section 287),

(b)no guaranteed loan (see section 288),

(c)proportion of eligible shares (see section 289),

(d)trading (see section 290),

(e)the carrying on of a qualifying activity (see section 291),

[F5(ea)the maximum amount raised annually through risk [F6finance investments] (see section 292A),]

[F7(eaa)the maximum risk finance investments when the relevant holding is issued (see section 292AA),

(eab)the maximum risk finance investments during the 5-year post-investment period (see section 292AB),]

F8(eb). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)use of the money raised (see section 293),

(g)the relevant company carrying on the relevant qualifying activity (see section 294),

[F9(ga)the permitted company age requirement (see section 294A),]

(h)unquoted status (see section 295),

(i)control and independence (see section 296),

(j)gross assets (see section 297),

[F10(ja)number of employees (see section 297A),]

[F11(jb)the proportion of skilled employees (see section 297B),]

(k)qualifying subsidiaries (see section 298), F12...

(l)property managing subsidiaries (see section 299) [F13, and

(m)no disqualifying arrangements (see section 299A)].

(4)Subject to section 293(7), subsection (5) applies if—

(a)the requirements of section 287, 293 or 294 would be met as to only part of the money raised by the issue of the relevant holding, and

(b)that holding is not otherwise capable of being treated as comprising separate holdings.

(5)If this subsection applies, this Chapter has effect in relation to the relevant holding as if it were two separate holdings consisting of—

(a)a holding from which the part of the money mentioned in subsection (4)(a) was raised, and

(b)a holding from which the remainder was raised.

Chapter 3 has effect as if the value of the relevant holding were to be apportioned between the two holdings treated as subsisting by this subsection.