The following Corporation Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
The commentary set out in this guidance note covers the current substantial shareholding exemption (SSE) regime. For further details of the regime, see Simon’s Taxes Division D1.10 and for details of the regime as it applied before 1 April 2017, please see Simon’s Taxes D1.1071.
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 member of a trading group or a trading sub-group. The trading conditions must also be met in certain circumstances by the investee company immediately after the disposal.
The other main conditions are set out in the Substantial shareholding exemption: overview guidance note.
The SSE legislation defines ‘trade’ as a trade, profession or vocation within the meaning of the Income Tax Acts, which must be conducted on a commercial basis with the intention of realising profits.
A particular definition also applies to the terms ‘trading company’, ‘trading group’ and ‘trading sub-group’ (see TCGA 1992, Sch 7AC, Part 3, paras 20, 21 and 22 respectively). 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.
‘Substantial’ is generally interpreted by HMRC to be more than 20%.
CG53116 provides further clarification on its interpretation of the meaning of substantial as:
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
This guidance note explains how to calculate the amount of tax that arises under the lifetime charge. In general terms the lifetime charge will apply to individuals who transfer property into a trust that is subject to the relevant property regime. See the Chargeable transfers and Occasions of
What is structures and buildings allowance (SBA)?From 29 October 2018, expenditure on constructing a non-residential building or structure, or in certain cases, expenditure on acquiring such a building or structure, qualifies for an SBA. The following note has been updated for the changes announced
Duty to prepare trust accountsUnder the laws of England and Wales, trustees have a duty to account to the beneficiaries for their financial administration of the trust fund. This duty is established by a substantial body of case law. In the case of Armitage v Nurse, Millett LJ stated:“Every
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.