Land and Buildings Transaction Tax (Scotland) Act 2013 Schedule 11 para 38

Determining ownership through intermediate companies

Schedule 11 paragraph 38 clarifies how ownership of a subsidiary is determined when it is held indirectly through one or more intermediate companies.

• Ownership for the 75% subsidiary test can be held either directly or indirectly through one or more intermediate companies.
• Where ownership is indirect, the proportion of ordinary share capital owned is calculated using the rules in sections 1155 to 1157 of the Corporation Tax Act 2010.
• Those Corporation Tax Act rules work by multiplying fractional interests down chains of companies and, where there are parallel chains, adding the resulting fractions together.
• This means a parent company can qualify as holding 75% of a subsidiary even if no single shareholding in the chain is 100%, provided the combined indirect ownership meets the threshold.