Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017

123 Section HA 6 amended (Corporate requirements)

(1)

After section HA 6(2), insert:

Exclusion: loss of continuity

(3)

A company is not eligible to be a qualifying company unless, at all times in an income year, a group of persons holds for the QC continuity period, minimum QC interests in the company that add up to at least 50%.

Exception for close relatives

(4)

For the purposes of subsection (3), a share transferred by a transferor to a close relative is treated as being held by a single notional person for the company from the time that the transferor acquired the share. A share subsequently transferred to a close relative of a subsequent transferor is similarly treated as held by the same single notional person.

Some definitions

(5)

In this section—

minimum QC interest, for a person and the QC continuity period, means the lowest voting interest or market value interest they have in the company during the QC continuity period

QC continuity period means the period starting on the day that the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 receives the Royal assent and ending on the last day in the income year.

(2)

In section HA 6, list of defined terms, insert “close relative”, “market value interest”, “minimum QC interest”, “QC continuity period”, and “voting interest”.

(3)

Subsection (1) applies for the 2017–18 and later income years.