Corporation Tax Act 2010 section 188FC

"Trading company" and "holding company"

Section 188FC defines what is meant by a "trading company" and a "holding company" for the purposes of Part 5A of the Corporation Tax Act 2010.

• A "trading company" is one whose business consists wholly or mainly of carrying on a trade.
• A "holding company" is one whose business consists wholly or mainly of holding shares or securities in its subsidiaries.
• For a company to qualify as a holding company, the subsidiaries in which it holds shares or securities must be 90% subsidiaries and must themselves be trading companies.
• Both definitions use the "wholly or mainly" test, meaning the relevant activity must represent more than 50% of the company's overall business.