Taxation of Chargeable Gains Act 1992 Schedule 7ZA paragraph 13

Activities of a company as a member of a partnership

Paragraph 13 of Schedule 7ZA sets out when a company's activities carried on through a partnership will be disregarded as trading activities for the purposes of determining whether a company qualifies as a trading company when shares in it are disposed of.

• When someone disposes of shares or securities in a company ("company A"), the trading status of partnership activities carried on by a company must be tested against specific conditions.
• If the individual (P) fails the profits and assets test in relation to the partnership, the company's partnership activities are treated as non-trading activities.
• If P fails the voting rights test in relation to the partnership, the company's partnership activities are likewise treated as non-trading activities.
• Even if the above tests are met, the partnership activities are still treated as non-trading if the company was not a member of the partnership throughout the entire relevant period.