Taxation of Chargeable Gains Act 1992 Schedule A1 paragraph 22A

Meaning of "trading company"

Paragraph 22A of Schedule A1 defines what constitutes a "trading company" for the purposes of the taper relief provisions in the Taxation of Chargeable Gains Act 1992.

• A trading company is one that carries on trading activities and whose activities do not include non-trading activities to a substantial extent.
• The definition is relevant to determining whether shares qualify for the more favourable business asset taper relief treatment.
• The test requires that non-trading activities must not form a substantial part of the company's overall activities.
• This provision was introduced by the Finance Act 2008 to clarify the meaning of "trading company" within the taper relief schedule.