Meaning of groups for utilisation of surplus ACT
In these regulations a group means a parent company resident in an EEA state1 together with all its 51% subsidiaries which are resident in the UK.
A company cannot be a parent company if it is a 51% subsidiary of another UK resident company2. The normal rules to determine whether a company is a 51% subsidiary apply (see D2.106)3, but ownership (directly or indirectly) of share capital is ignored if it is held as trading stock or in a non-resident company4.
In considering whether a company is a 51% subsidiary, the holding of ordinary share capital may sometimes not be an appropriate test, eg where persons, whether members or not, enjoy special rights or powers. In such a case, holdings of all kinds of share capital and any special powers etc may be taken into account5.
A company is not a 51% subsidiary at a time when there are arrangements in existence under which one or more persons could obtain control of the subsidiary but not of the parent. A government power to direct disposal of assets of a subsidiary is not an 'arrangement' for this purpose. Nor is a company a 51% subsidiary unless the parent company is beneficially entitled to more than 50% of profits available for distribution to equity shareholders and to more than 50% of assets available to equity shareholders on a winding up6.
Groups may be split or amalgamated or a single company may move