SSE and the trading requirement

Produced by a Tolley Corporation Tax expert

Corporation Tax

Guidance

SSE ― the trading condition

The commentary set out in this guidance note covers the current substantial shareholding exemption (SSE) with specific reference to the interpretation of ‘trading’. For more detailed commentary, see Simon’s Taxes Division D1.10.

What is a trading company or trading group?

One of the conditions that must be satisfied by the investee company for the purposes of the SSE is that it must be a trading company or the holding company of a trading group or trading sub-group.

A particular definition applies to the terms ‘trading company’, ‘trading group’ and ‘trading sub-group’. In each case, the activities of the company, group or sub-group must not include substantial amounts of non-trading activities, such as the passive holding of investments or intra-group investment activities (this is explored further below).

A holding company means the principal company of the group or, in the case of a subgroup, the entity that would be the principal company of that subgroup except that it is itself a subsidiary of another company. The fact that one company holds shares

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Popular Articles

Owner-Managed Businesses

Class 4 national insurance contributions

Class 4 national insurance contributionsWhat is Class 4 NIC?Class 2 and Class 4 national insurance contributions (NIC) are paid by self-employed individuals and partners in a partnership on their profits arising within the UK. This guidance note considers Class 4 contributions. For Class 2

14 Jul 2020 11:13 | Produced by Tolley Read more

Personal Tax

Losses on shares set against income

Losses on shares set against incomeUsually, allowable capital losses can only be set against chargeable gains. If the losses are not fully utilised against gains in the year in which they arise, the excess is carried forward to use against future gains. See the Use of capital losses guidance note

14 Jul 2020 12:12 | Produced by Tolley Read more

Value Added Tax

Reverse charge ― buying in services from outside the UK

Reverse charge ― buying in services from outside the UKThis guidance note covers the reverse charge that applies to services that have been bought in from outside the UK. For an overview of VAT and international services more broadly, see the International services ― overview guidance note. For

15 Dec 2020 14:02 | Produced by Tolley Read more

��Ӱ��