Corporation Tax Act 2010 section 175

Cases in which both sections 170 and 172 apply

Section 175 deals with how to determine a company's ownership proportion when two special rules overlap — one concerning shares or securities with limited rights and another concerning shares or securities with temporary rights — but the rule for certain arrangements involving fixed-rate preference shares does not apply.

• This section applies where a company holds shares or securities that are both subject to limited rights (the section 170 rule) and temporary rights (the section 172 rule), but the fixed-rate preference share rule in section 174 does not apply.
• Four separate calculations of the holding company's ownership proportion must be carried out: using the limited rights basis alone, the temporary rights basis alone, both bases combined, and a standard calculation ignoring both special rules entirely.
• The company's ownership proportion is taken to be whichever of those four calculations produces the lowest figure.
• The effect is to ensure that where both special rules are in play, the most restrictive outcome applies, preventing a company from claiming a more favourable proportion than any single basis would support.