SSE and the trading requirement

Copyright © 2025 LexisNexis
Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance

SSE and the trading requirement

Copyright © 2025 LexisNexis
Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance
imgtext

SSE ― the trading condition

The commentary set out in this guidance note covers the current substantial shareholding exemption (SSE) with specific reference to the interpretation of ‘trading’. For more detailed commentary, see Simon’s Taxes Division D1.10.

What is a trading company or trading group?

One of the conditions that must be satisfied by the investee company for the purposes of the SSE is that it must be a trading company or the holding company of a trading group or trading sub-group.

A particular definition applies to the terms ‘trading company’, ‘trading group’ and ‘trading sub-group’. In each case, the activities of the company, group or sub-group must not include substantial amounts of non-trading activities, such as the passive holding of investments or intra-group investment activities (this is explored further below).

A holding company means the principal company of the group or, in the case of a subgroup, the entity that would be the principal company of that subgroup except that it is itself a subsidiary of another company. The fact that one company holds shares

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 10 May 2024 09:13

Home/ Tolley Tax Guidance/ Corporation Tax / Preparing the corporation tax return

Popular Articles

Personal Tax

Inter-spouse transfer

Inter-spouse transferIntroductionWhen a chargeable asset is transferred between two spouses or civil partners, there is a disposal by the transferor spouse / civil partner and an acquisition by the transferee spouse / civil partner for capital gains tax purposes. For simplicity, spouses and civil

14 Jul 2020 12:01 | Produced by Tolley Read more Read more
Personal Tax

Foreign self-employment

Foreign self-employmentTrading in another jurisdiction involves many issues, only some of which involve taxation. Advice should be taken, not only in relation to tax but on the wider business implications. For an overview of the points to consider for certain jurisdictions see Tolley's Global

14 Jul 2020 11:44 | Produced by Tolley Read more Read more
Personal Tax

Maintenance payments

Maintenance paymentsMaintenance payments are payments made by a taxpayer to their former or separated spouse / civil partner for the maintenance of that person or their children. To obtain any tax relief for maintenance payments, one of the couple must have been born before 5 April 1935 and the

14 Jul 2020 12:12 | Produced by Tolley Read more Read more