Taxation of Chargeable Gains Act 1992 Schedule 7ZA paragraph 1

Meaning of "trading company" and "trading group" for business asset disposal relief

Schedule 7ZA paragraph 1 defines the terms "trading company" and "trading group" as they are used in the business asset disposal relief provisions.

• The definitions of "trading company" and "trading group" apply specifically within the business asset disposal relief rules, covering both material disposals of business assets and disposals of trust business assets.
• The terms take their meaning from the gifts of business assets provisions in section 165A, but with modifications set out in Part 2 of Schedule 7ZA.
• The term "trading activities" must also be read in accordance with Part 3 of Schedule 7ZA, which provides further clarification of what counts as trading for these purposes.
• Getting these definitions right is essential, as whether a company qualifies as a "trading company" or belongs to a "trading group" determines whether business asset disposal relief can be claimed on a disposal.