Income Tax Act 2007 section 257DC

The issuing company to carry on the qualifying business activity

Section 257DC requires that the issuing company (or its qualifying 90% subsidiary) must be the one carrying on the new qualifying trade, any preparatory work, and any research and development throughout Period B, with limited exceptions for insolvency events.

• Throughout Period B, the new qualifying trade, any preparatory work, and any related research and development must be carried on only by the issuing company or a qualifying 90% subsidiary — not by any other person.
• Where the issuing company or its qualifying 90% subsidiary is carrying out preparatory work, any carrying on of the same trade by another company before the issuing company or its subsidiary begins trading is disregarded.
• The requirement is not treated as breached if the trade ceases due to administration, receivership, winding up, or dissolution, provided the trade is subsequently carried on by a person unconnected with the issuing company during Period A.
• The insolvency exception only applies where the administration, receivership, winding up, or dissolution is for genuine commercial reasons and is not part of a tax avoidance scheme or arrangement.