Taxation of Chargeable Gains Act 1992 section 236M

Controlling interest requirement

Section 236M sets out the conditions that must be met for a settlement's trustees to satisfy the controlling interest requirement in relation to a company (referred to as company C), which is relevant to certain capital gains tax reliefs on disposals of shares.

• The trustees must hold more than 50% of the ordinary share capital of company C and possess voting powers that would yield a majority of votes on all questions affecting the company as a whole.
• The trustees must be entitled to more than 50% of the profits available for distribution to equity holders and more than 50% of the assets available on a winding up.
• There must be no provisions in any agreement or instrument affecting the company's constitution, management, shares or securities that could cause these conditions to cease to be met without the trustees' consent.
• Further provisions in section 236T ensure that trustees are not treated as failing these conditions merely because of certain common commercial provisions or standard trust deed provisions.