Income Tax (Earnings and Pensions) Act 2003 Schedule 5 paragraph 10

The qualifying subsidiaries requirement

Paragraph 10 of Schedule 5 sets out the requirement that all subsidiaries of a company operating a Share Incentive Plan must themselves be qualifying subsidiaries.

• A company with one or more subsidiaries can only be a qualifying company if every one of its subsidiaries is a qualifying subsidiary (as defined in paragraph 11).
• A subsidiary for these purposes means any company that the parent company controls, either on its own or together with any person connected with it.
• Control is determined by reference to sections 450 and 451 of the Corporation Tax Act 2010, which define control in the context of close companies.
• This requirement ensures that the entire corporate group meets the necessary standards, not just the parent company offering the plan.