ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL The change in section 290(2)
Paragraph 3(2) of Schedule 28B to ICTA requires that:
“The relevant company must be one of the following -(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.”
This is rewritten in section 290(1) of this Act.
The parent company of a trading group is defined in paragraph 3(6):
“For the purposes of this paragraph 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 sub-paragraph (7) are fulfilled by what would be the business of the company and its qualifying subsidiaries if all the activities, taken together, of the company and its qualifying subsidiaries were regarded as one business.”
This is rewritten in section 290(3) of this Act (and in section 298, the qualifying subsidiaries requirement, and in section 332, by the definition of “parent company”).
Change 61 ensures that a relevant company can qualify as a parent company if there is the intention that one or more companies will become a qualifying subsidiary.
The new provision in section 290(2) states:
“If the relevant 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 relevant company is treated as a parent company for the purposes of subsection (1)(b), and(b)the reference in subsection (1)(b) to the group includes the relevant 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.”