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HMRC internal manual

Company Taxation Manual

Close companies: close investment holding companies: holding companies

CTA2010/S34 (2)(c) (formerly ICTA88/S13A (2)(c))

A company will not be a close investment-holding company if throughout the accounting period it exists wholly or mainly for the purpose of holding shares in, or securities of, or making loans to, one or more companies each of which is either:

  • a qualifying company,
  • a company (under the control of the relevant company, or of a company which has control of the relevant company) which itself exists wholly or mainly to hold shares in or securities of, or to make loans to, one or more qualifying companies.

The main effect of this subsection - Section 34 (2)(c) - is to exclude from being a close investment-holding company the holding company of a trading group or a property investment group, even where the group consists only of the holding company and one trading or property investment subsidiary.

The subsection also operates to exclude the ultimate holding company where there is a vertical structure with an intermediate holding company interposed between the ultimate holding company and the trading or property investment subsidiaries. In addition, it excludes a company that is not a holding company, but exists to make loans to fellow subsidiaries, which are trading, or property investment companies.