Taxation of Chargeable Gains Act 1992 Schedule 7ZA paragraph 3

Attribution of activities of a joint venture company

Schedule 7ZA paragraph 3 sets out the conditions that must be met before the trading activities of a joint venture company can be attributed to another company for the purposes of determining whether that company qualifies as a trading company or trading group under the entrepreneurs' relief provisions.

• When shares or securities in a company ("company A") are being disposed of, the activities of a joint venture company can only be attributed to company A if two tests are satisfied.
• The person making the disposal (referred to as "P") must pass the shareholding test in relation to the joint venture company, as set out in paragraphs 5 to 8 of Schedule 7ZA.
• P must also pass the voting rights test in relation to the joint venture company, as set out in paragraphs 9 to 12 of Schedule 7ZA.
• Both tests must be met — passing only one is not sufficient for the joint venture company's activities to be attributed.