SSE and the trading requirement

Copyright © 2026 LexisNexis
Produced by a Tolley Corporation Tax expert
Corporation Tax
Guidance

SSE and the trading requirement

Copyright © 2026 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+™
  • 03 Nov 2025 11:00

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

Popular Articles

Trusts and Inheritance Tax

Payments to trust beneficiaries

Payments to trust beneficiariesThis guidance note considers the trustees powers to make payments and whether the payment made is income or capital.This guidance note is designed to give outline and background for accountants and tax advisers who deal with clients establishing trusts. It is not

14 Jul 2020 12:52 | Produced by Tolley Read more Read more
Employment Tax

Ministers of religion

Ministers of religionMost ministers of religion or members of the clergy are either office-holders or employees and so their earnings are taxable under ITEPA 2003 as employment income and are subject to Class 1 National Insurance.For the purposes of the tax system, a minister does not have to belong

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

Computation of corporation tax

Computation of corporation taxCompanies pay corporation tax on the taxable total profits (TTP) generated in a chargeable accounting period (CAP).To ascertain whether the entity is within the charge to corporation tax, see the Charge to corporation tax guidance note.For more information on the type

14 Jul 2020 11:16 | Produced by Tolley Read more Read more