Taxation of Chargeable Gains Act 1992 Schedule 1A paragraph 9

Meaning of "25% investment"

Section 9 of Schedule 1A defines when a person is considered to hold a "25% investment" in a company, a threshold that is relevant to determining whether certain capital gains tax reliefs or restrictions apply.

• A person has a 25% investment in a company if they hold or can acquire 25% or more of the voting power, or would receive 25% or more of sale proceeds, distributed income, or assets on winding up
• Equity for this purpose means shares (excluding restricted preference shares) and loans (excluding normal commercial loans), and includes stock and other membership interests
• Both direct and indirect receipt of proceeds or assets counts, including where a person indirectly benefits through an ownership chain in another entity
• A normal commercial loan relationship alone does not create a 25% investment, and partnership members must account for their share of partnership proceeds on a just and reasonable basis

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