Section 257HG | Meaning of “qualifying business activity” ^F1

(1)In this Part “qualifying business activity”, in relation to the issuing company, means—^F1

(a)activity A, or^F1

(b)activity B,^F1

if it is carried on by the company or a qualifying 90% subsidiary of the company.This is subject to subsection (3).

(2)Activity A is—^F1

(a)the carrying on of a new qualifying trade which, on the date the relevant shares are issued, the company or a qualifying 90% subsidiary of the company is carrying on, or^F1

(b)the activity of preparing to carry on (or preparing to carry on and then carrying on) a new qualifying trade—^F1

(i)which, on that date, is intended to be carried on by the company or such a subsidiary, and^F1

(ii)which is begun to be carried on by the company or such a subsidiary.^F1

(3)Activity B is the carrying on of research and development—^F1

(a)which, on the date the relevant shares are issued, the company or a qualifying 90% subsidiary of the company is carrying on, or which the company or such a subsidiary begins to carry on immediately afterwards, and^F1

(b)from which, on that date, it is intended—^F1

(i)that a new qualifying trade which the company or such a subsidiary will carry on will be derived, or^F1

(ii)that a new qualifying trade which the company or such a subsidiary is carrying on, or will carry on, will benefit.^F1

(4)For the purposes of subsection (3)(a), when research and development is begun to be carried on by a qualifying 90% subsidiary of the issuing company, any carrying on of the research and development by it before it became such a subsidiary is ignored.^F1

(5)References in subsection (2)(b)(i) or (3)(b) to a qualifying 90% subsidiary of the issuing company include references to any existing or future company which will be such a subsidiary at any future time.^F1