Taxation of Chargeable Gains Act 1992 Schedule 7AC paragraph 22

Meaning of "trading subgroup"

Section 22 defines what constitutes a "trading subgroup" for the purposes of the substantial shareholdings exemption, setting out the qualifying trading activities and how subgroup members' activities are assessed collectively.

• A trading subgroup is one where at least one member carries on trading activities and the combined activities of all members do not include a substantial element of non-trading activities.
• Trading activities include activities carried on in the course of an existing trade, in preparation for a new trade, or with a view to acquiring a significant interest in a trading company or holding company of a trading group outside the same group.
• Activities aimed at starting a trade or acquiring a significant interest only count as trading activities if the trade is commenced or the acquisition is completed as soon as reasonably practicable.
• The activities of all subgroup members are treated as a single business, so transactions between subgroup members are disregarded, but transactions between a subgroup member and a group company outside the subgroup are not disregarded.