Taxation (International and Other Provisions) Act 2010 section 464

Meaning of "25% investment"

Section 464 defines what it means for a person to have a "25% investment" in another person (which may be a company or other entity), based on their equity stake, voting power, or entitlement to proceeds, income or assets.

• A person has a 25% investment if they hold 25% or more of the voting power, or would receive 25% or more of equity sale proceeds, distributed income, or winding-up assets
• "Equity" means shares (excluding restricted preference shares) and loans (excluding normal commercial loans) — so ordinary shares and non-standard lending arrangements count
• Both direct and indirect receipt of proceeds or assets count, including where benefits flow through intermediate entities based on their percentage ownership of equity
• A normal commercial loan between two parties does not, by itself, create a 25% investment relationship