CG53110 - Substantial shareholdings exemption: the trading company/group/subgroup requirements - trading company

TCGA92/SCH7AC/PARA20

Paragraph 20 Schedule 7AC TCGA 1992 contains the definition of 바카라 사이트˜trading company바카라 사이트™ that applies for the purposes of the substantial shareholdings exemption regime. A 바카라 사이트˜trading company바카라 사이트™ is a company

  • that carries on 바카라 사이트˜trading activities바카라 사이트™, (see CG53113) and
  • whose activities do not to a substantial extent include activities that are not trading activities.

Paragraph 20 also explains what is meant by 바카라 사이트˜trading activities바카라 사이트™ for these purposes. These are activities carried on by a company

  • in the course of, or for the purposes of, a trade it is carrying on (CG53113b);
  • for the purposes of a trade it is preparing to carry on (CG53113c);
  • with a view to it acquiring or starting to carry on a trade (CG53113d);
  • with a view to it acquiring a significant interest in the share capital of a trading company, or the holding company of a trading group or subgroup (subject to the restrictions outlined below) (C53113d).

There are two restrictions. First, the last two types of activity only count as trading activities if an acquisition is made, or the company starts to carry on a trade, as soon as is reasonably practicable in the circumstances (CG53113e).

Second, for last type of activity the acquisition will only count as significant if

  • it is an acquisition of ordinary share capital, and
  • the company whose shares are to be acquired (Target) is not already a member of the same group (CG53006 explains what is a group for the purposes of the substantial shareholdings legislation) as the acquiring company (Acquirer), and the shares to be acquired would either
  • make Target a 51% subsidiary (CG53006 explains what is a 51% subsidiary for the purposes of the substantial shareholdings legislation)of Acquirer, or
  • give Acquirer a qualifying shareholding in a joint venture company without making the two companies members of the same group.

Note that there are special rules for companies that have a 바카라 사이트˜qualifying shareholding바카라 사이트™ in a 바카라 사이트˜joint venture company바카라 사이트™ - see CG53114. There is guidance on how you might measure the extent of a company바카라 사이트™s activities, and what we understand to be meant by 바카라 사이트˜substantial in this context, at CG53116. The same definitions of trading company and trading activities were brought into the taper relief regime by Finance Act 2002 for time from 17 April 2002.