CTM18320 | Shadow ACT: definition of parent and subsidiary companies

SI1999/358 Reg6 (1)

The definition of a group is based on the provisions in ICTA88/S240.

A group consists of:

• a parent company resident in the UK, and

• its 51 per cent subsidiaries.

Parent company Reg6 (2)(a)

A company cannot be the parent company of a group if it is itself a 51 per cent subsidiary of another company, and:

• it has no 51 per cent subsidiary, or

• it and its 51 per cent subsidiaries are all members of the same group.

The parent company is the top company within the group. While no other member can be the parent company of that group they may be the parent company of another group. That would happen where a company that was a member of a group had one or more 51 per cent subsidiaries which were not also members of the group in which it was a 51 per cent subsidiary.

51 per cent subsidiary Reg6 (2)(b)

A company is a 51 per cent subsidiary if it is

• UK resident, and

• a 51 per cent subsidiary within the meaning of ICTA88/S838.