Corporation Tax Act 2010 section 1157

Adding fractions together

Section 1157 explains how to combine multiple ownership fractions when a company owns shares in another company through more than one route, whether directly, indirectly, or both.

• Where company A holds fractions of company C's ordinary share capital through different ownership routes, all those fractions must be added together to determine A's total ownership of C
• The different routes can include a direct holding by A in C, as well as indirect holdings through chains of intermediary companies
• An indirect holding counts as a separate fraction if it passes through a different chain of intermediaries — that is, one that does not consist of exactly the same set of companies as another chain already counted
• This aggregation is essential for determining whether C qualifies as a 51% subsidiary or 75% subsidiary of A