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
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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

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  • 03 Nov 2025 11:00

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