Sale of lessor companies and similar arrangements: establishing change of ownership: consortia: consortia and the wider group
S394 looks through the consortium member to the principal company when the consortium member is a 75% subsidiary of another company.
Where the consortium member is a 75% subsidiary of another company there is a relevant change in the relationship between company A the lessor company and its principal company when ever there is either:
- a fall in the ownership proportion: or
- a company which is part of the chain of ownership between Company A, the lessor company and the principal company stops being a 75% subsidiary.
In this example the principal companies of A Ltd are C Ltd and Y Ltd.
The chain of relationships from A Ltd to C Ltd runs through E Ltd and B Ltd.
B Ltd sells all of its holding in E Ltd to Y Ltd.
There is a relevant change in the relationship between A Ltd and C Ltd, its principal company because E Ltd ceases to be a 75% subsidiary of B Ltd.
There is therefore a qualifying change of ownership in relation to A Ltd.