Capital Allowances Act 2001 section 212G

Qualifying 75% subsidiaries

Section 212G defines what a "qualifying 75% subsidiary" means for the purposes of the anti-avoidance rules on allowance buying, specifically as used in sections 212E (principal companies) and 212F (consortium ownership).

• A subsidiary with ordinary share capital qualifies if it is a 75% subsidiary of the parent company; a subsidiary without ordinary share capital qualifies if the parent has control of it
• In both cases, the parent must also be beneficially entitled to at least 75% of the subsidiary's distributable profits and at least 75% of its assets on a winding-up
• The rules on identifying equity holders and measuring distributable profits and assets follow the group relief provisions in Chapter 6 of Part 5 of CTA 2010
• Where the subsidiary has no ordinary share capital, its members are treated as if they were equity holders for the purposes of applying those distribution tests