SolvedBLM80365 | Sale of lessor companies and similar arrangements: establishing change of ownership: exceptions to qualifying change of ownership - consortia
From HM Revenue & Customs · Business Leasing Manual
It is possible for a qualifying change in ownership to occur without any true change in the economic ownership of the lessor company - company A.
The principal companies of A Ltd are F Ltd and Z Ltd. Shares in A Ltd are transferred by E Ltd to B Ltd. Both E Ltd and B Ltd are wholly owned by F Ltd so that the transfer is an intragroup transfer or reorganisation.
The transfer of shares in A Ltd would fall foul of section 394 CTA2010 because the relevant fraction – the percentage of the ordinary share capital of A Ltd held by E Ltd – is less at the end of the day than at the start of the day.
It is clear that there has been no change in the economic ownership of A Ltd - F Ltd still owns 50% of the shares in A Ltd but it now owns those shares via B Ltd rather than via E Ltd.
Section 396 CTA2010 offers an exception in the case of intra-group reorganizations so that there is no qualifying change of ownership when the percentage of the ordinary share capital of company A (A Ltd) owned directly or indirectly by the principal company remains the same. This is the case here.