ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL The Change in section 181(3)
Section 181 rewrites the requirement in section 293 of ICTA for the parent company of a trading group.
Section 293(2) of ICTA requires that (emphasis added):
“The company must throughout the relevant period be -(a)a company which exists wholly for the purpose of carrying on one or more qualifying trades….or(aa)the parent company of a trading group.”
The parent company of a trading group is defined in section 293(3A) of ICTA:
“For the purposes of this section a company is the parent company of a trading group if—(a)it has one or more subsidiaries;(b)each of its subsidiaries is a qualifying subsidiary of the company; and(c)the requirements of subsection (3B) below are fulfilled by what would be the business of the company and its subsidiaries if all the activities, taken together, of the company and its subsidiaries were regarded as one business.”
This is rewritten in section 181(4) of this Act (and in section 187 and, by the definition of parent company, in section 257(1)).
An extension of Change 42 in section 181(3) ensures that an issuing company can qualify as a parent company where there is the intention that one or more companies will become a qualifying subsidiary:
“If the company intends that one or more other companies should become its qualifying subsidiaries with a view to their carrying on one or more qualifying trades—(a)the company is treated as a parent company for the purposes of subsection (2)(b), and(b)the reference in subsection (2)(b) to the group includes the company and any existing or future company that will be its qualifying subsidiary after the intention in question is carried into effect.This subsection does not apply at any time after the abandonment of that intention.”