Income Tax (Earnings and Pensions) Act 2003 section 11B

Meaning of "qualifying 90% subsidiary"

Section 11B defines what constitutes a "qualifying 90% subsidiary" for the purposes of the share incentive plan provisions, setting out the ownership and control tests that must be satisfied.

• The holding company must own at least 90% of the subsidiary's issued share capital and hold at least 90% of its voting power.
• The holding company must be entitled to at least 90% of the subsidiary's distributable assets (on a winding up or otherwise) and at least 90% of its distributable profits.
• No person other than the holding company may have control of the subsidiary.
• No arrangements may exist that would cause any of these conditions to cease to be met.