Commentary

D1.1001 Overview of the substantial shareholding exemption

Corporate tax
Corporate tax | Commentary

D1.1001 Overview of the substantial shareholding exemption

Corporate tax | Commentary

Division D1.10     Substantial shareholding exemption

For updates affecting this Division please see Part D0 Updates

The substantial shareholding exemption—Overview

D1.1001 Overview of the substantial shareholding exemption

The purpose of the substantial shareholding exemption (SSE) is to exempt gains and disallow losses realised by companies and groups on certain disposals where the investing company (or group) holds (or held) a 'substantial shareholding' (broadly, a 10% shareholding) in a trading company or trading sub-group. Thus for the exemption to apply, a company (see definition in D1.1065) must make the disposal. The exemption is not therefore applicable to disposals by individuals or trusts. As regards partnerships or limited liability partnerships, a corporate partner may be eligible for the exemption in respect of its share of the disposal of a partnership asset (see D1.1065 for details of the meaning of an interest in shares).

For the purposes of SSE, a group is the worldwide group (including both UK and non-UK resident subsidiaries) that includes the principal

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