SolvedCTM07020 | Transfer of deductions – Qualifying changes
From HM Revenue & Customs · Company Taxation Manual
A 'qualifying change' of ownership has the meaning given in CAA01/PART2/CHAPTER16A, and is described by four possible conditions. If any of the conditions is met then there has been a qualifying change.
The conditions look at the status of a company, company C, at the beginning and end of the 'relevant day':
Condition A: That the principal company or companies of the group or consortium owning company C are different at the beginning and end of the day, or that at the beginning of the day there was no principal company and at the end there is one (or more);
Condition B: That the principal company of C is a consortium principal company and at the end of the day the share it holds in company C is more than it was at the beginning of the day;
Condition C: That the relevant activity of company C is a trade, and at the end of the day the trade is carried on in partnership by two or more companies following a transfer of the trade under CTA10/PART22/CHAPTER1 (CTM06060);
Condition D: that company C carries on the relevant activity in partnership at the beginning of the day, and by the end of the day company C’s share in the partnership is less or nil.
If any of the conditions apply, then the day that they occur is the 'relevant day' on which the 'qualifying change' occurs.
Principal company is defined in CAA01/S212E both for groups and consortia. Broadly the principal company is the one at the top of the ownership chain of a group of 75 per cent subsidiaries, which is not itself a qualifying 75 per cent subsidiary of any other company.