Corporation Tax Act 2010 section 415

"Qualifying change" in company's interest in a business

Section 415 defines what constitutes a "qualifying change" in a company's interest in a business, by reference to a reduction in its percentage share of the profits or losses of that business.

• A qualifying change occurs on any day when the company's percentage share of business profits or losses at the end of that day is lower than at the start of the same day.
• The "relevant percentage share" is the company's percentage share in the profits or loss of the business, calculated in accordance with section 416.
• A nil share — for example, following dissolution of a partnership — still counts as a share for the purposes of this test.
• This provision forms part of the "sales of lessors" rules, which aim to counteract tax advantages arising from certain changes in the ownership of leasing businesses.