Reliefs: employee-ownership trusts: conditions: the 'trading requirement': principal company of a trading group
TCGA92/S236I(3), (4) and (5)
Trading group means a group
- one or more of whose members carry on trading group activities, and
- the activities of whose members, taken together, do not include to a substantial extent activities other than trading group activities.
Trading group activities means activities carried on by a member of the group in the course of, or for the purposes of, a trade being carried on by any member of the group.
For these purposes a business carried on by a company in partnership with one or more other persons is to be treated as not being a trading group activity. This is to ensure that control of the company by the trustees carries with it control of the company’s business; where a company carries on business in partnership with others, control of the business does not follow from control of the company.
In applying this rule, the activities of members of a group are to be treated as one business. Activities are therefore disregarded to the extent that they are intra-group activities.