Section 809VD | Condition A ^F1F2

(1)Condition A is that the target company is—

(a)an eligible trading company,

(b)an eligible stakeholder company, ...^F3

(ba)an eligible hybrid company, or^F4

(c)an eligible holding company.

(2)A company is an “eligible trading company” if—

(a)it is a private limited company,

(b)it carries on one or more commercial trades or is preparing to do so within the next 5 years, and^F5

(c)carrying on commercial trades is all or substantially all of what it does (or of what it is reasonably expected to do once it begins trading).

(3)A company is an “eligible stakeholder company” if—

(a)it is a private limited company,

(b)it exists wholly for the purpose of making investments in eligible trading companies (ignoring any minor or incidental purposes), and

(c)it holds one or more such investments or is preparing to do so within the next 5 years.^F6

(3A)A company is an “eligible hybrid company” if—^F7

(a)it is a private limited company,^F7

(b)it is not an eligible trading company or an eligible stakeholder company,^F7

(c)it carries on one or more commercial trades or is preparing to do so within the next 5 years,^F7

(d)it holds one or more investments in eligible trading companies or is preparing to do so within the next 5 years, and^F7

(e)carrying on commercial trades and making investments in eligible trading companies are all or substantially all of what it does (or of what it is reasonably expected to do once it begins operating).^F7

(4)The references in subsections (3) and (3A) to making investments is to be read in accordance with section 809VC.^F8

(5)A company is an “eligible holding company” if—

(a)it is a member of an eligible trading group or of an eligible group that is reasonably expected to become an eligible trading group within the next 5 years,^F9

(b)an eligible trading company in the group is a 51% subsidiary of it, and

(c)if the ordinary share capital that it owns in the eligible trading company is owned indirectly, each intermediary in the series is also a member of the group.

(6)“Group” means a parent company and its 51% subsidiaries.

(7)“Parent company” means a company that—

(a)has one or more 51% subsidiaries, but

(b)is not itself a 51% subsidiary of any company.

(8)A group is an “eligible group” if the parent company and each of its 51% subsidiaries are private limited companies.

(9)A group is an “eligible trading group” if—

(a)it is an eligible group, and

(b)carrying on commercial trades is all or substantially all of what the group does (taking the activities of its members as a whole).

(10)The reference in subsection (5) to owning ordinary share capital indirectly is to be read in accordance with section 1155 of CTA 2010.

(11)A company is a “private limited company” if—

(a)it is a body corporate whose liability is limited,

(b)it is not a limited liability partnership, and

(c)none of its shares are listed on a recognised stock exchange.