INTM561290 - Hybrids: allocation of DII within a group: condition E

There is a time during the overlapping period where Company A and Company B are both within the same group of companies

  • If for part of the overlapping period Company A is not in the same group of companies as Company B, that part is excluded from the overlapping period, but remains part of the surplus period
  • If for part of the overlapping period Company B is not in the same group of companies as Company A, that part is excluded from the overlapping period, but remains part of the shortfall period

For example, Company A has an accounting period of 1 January 2023 to 31 December 2023 in which it has a DII surplus (its surplus period).

Company B has an accounting period of 1 April 2022 to 31 March 2023 in which it has a DII shortfall (its shortfall period).

The overlapping period is 1 January 2023 to 31 March 2023.

Company C owns 75% of the ordinary share capital of Company B and acquires 75% of the ordinary share capital in Company A on 1 February 2023. Company A and Company B become members of the same group of companies from that date.

Company A바카라 사이트™s surplus period is 1 January to 31 December 2023. As it did not become a member of the same group as Company B until 1 February, January would not form part of the overlapping period, which is 1 February 2023 to 31 March 2023.

If Company C reduced its share in Company B to below 75% of ordinary share capital on 1 March 2023, Company A and Company would cease to be members of the same group of companies.

March 2023 would remain part of Company B바카라 사이트™s shortfall period (1 April 2022 to 31 March 2023), but be excluded from the overlapping period, which now becomes 1 February 2023 to 28 February 2023.

In each case, Condition E is still met.

75% subsidiary

This takes the same meaning as in section 151 CTA 2010, that at least 75% of ordinary share capital of the subsidiary is beneficially held by the shareholder.

For example, if Company A owns 75% of the ordinary share capital of Company B, or vice versa, they are members of the same group of companies.

Section 151 CTA 2010 places further conditions on this definition.