Corporation Tax Act 2010 section 396

No qualifying change of ownership where principal company's interest in consortium company unchanged

Section 396 ensures that no qualifying change of ownership arises for a consortium-owned company merely because the composition of the consortium changes, provided the principal company's percentage interest in the consortium company remains the same.

• The section applies where a company ("A") is owned by a consortium and a relevant change occurs in the relationship between A and a principal company of A
• If the principal company's percentage of ordinary share capital in A is the same at the beginning and end of the day on which the change occurs, there is no qualifying change of ownership on that day
• Ownership is measured by the percentage of ordinary share capital beneficially owned, whether directly or indirectly, by the principal company
• The rules for determining indirect ownership of ordinary share capital in sections 1155 to 1157 of the Corporation Tax Act 2010 apply when assessing whether the principal company's interest has changed