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HMRC internal manual

Apprenticeship Levy Manual

Mergers, acquisitions and joint ventures: example 3

Connection between companies

In July 2017, A Group Plc purchases all of the issued share capital of B Ltd and 55% of the issued share capital of C Ltd.

Subject to any other connections companies A, B and C have, all 3 companies will continue to be eligible for the £15,000 levy allowance for the remainder of the tax year. In the following tax year, as A Group Plc holds more than 50% of the share capital of both B Ltd and C Ltd, at the start of the tax year all 3 companies are connected as companies B Ltd and C Ltd are controlled by the same person. This means that only one Levy allowance can be used within the group.