Land and Buildings Transaction Tax (Scotland) Act 2013 section 45

Determining ownership of a subsidiary through indirect holdings

Section 45 clarifies how ownership of a subsidiary company is determined for the purposes of the 75% subsidiary test, including where shares are held indirectly through one or more intermediate companies.

• Ownership of ordinary share capital for the 75% subsidiary test can be either direct or indirect (i.e. held through one or more intermediate companies).
• Where shares are held indirectly, the amount of ordinary share capital owned is calculated using the rules in the Corporation Tax Act 2010 (sections 1155 to 1157).
• The Corporation Tax Act rules work by multiplying fractional interests down the chain of companies and then adding results together where there are multiple routes of ownership.
• This provision ensures that group relief for LBTT purposes follows an established and well-understood method for calculating indirect shareholdings.

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