Corporation Tax Act 2010 section 155

Arrangements for transfer of company owned by consortium etc.

Section 155 prevents consortium relief from being claimed where arrangements are in place that would change the control or ownership of a trading company that is nominally owned by a consortium.

• A trading company that would otherwise be owned by a consortium loses that status if, during an accounting period, either the trading company or a consortium member has surrenderable amounts and certain arrangements exist that could alter control or ownership.
• The arrangements caught include those where the trading company or its successor could become a 75% subsidiary of a company outside the group, or where persons owning less than 50% of the ordinary share capital have or could obtain control.
• Arrangements are also caught where a person, alone or with connected persons, holds or could obtain at least 75% of the qualifying votes at a general meeting, or where an outside company could take over the whole or part of the trading company's trade.
• Where the trading company is owned indirectly by a consortium through a holding company, the anti-avoidance rules extend to the holding company as well, though the voting control test does not apply if the person in question is that holding company.