Corporation Tax Act 2010 section 33

Interpretation of section 32(2) and (3)

Section 33 provides detailed rules for interpreting the subsidiary and consortium ownership tests used to determine which companies qualify for the small profits rate.

• A company is only treated as a 51% subsidiary if the equity holders are entitled to at least 51% of the profits and assets, not just 51% of the shares — ensuring the shareholding reflects the true economic relationship.
• The basic legal test for being a 51% subsidiary (based on ordinary share capital ownership) still applies alongside the additional economic tests.
• Shares held by a company acting as a share dealer are ignored when determining whether the subsidiary relationship exists.
• For consortium ownership, a member must satisfy not only the basic 5% shareholding test but also an economic entitlement test relating to profits and assets.