Income Tax Act 2007 section 190

Meaning of "qualifying 90% subsidiary"

Section 190 defines what it means for a company to be a "qualifying 90% subsidiary" of another company for the purposes of the Enterprise Investment Scheme.

• A company is a qualifying 90% subsidiary if the parent holds at least 90% of its share capital, voting power, rights to distributable assets and distributable profits, and no other person has control of it
• No arrangements may exist that would cause any of these ownership and control conditions to cease being met
• A company can also qualify as a 90% subsidiary indirectly through a chain of two companies, provided one link in the chain is a 90% relationship and the other is a 100% relationship
• Certain events such as winding up, dissolution, administration or receivership do not automatically breach these conditions, and nor do genuine commercial disposals that are not tax-motivated