Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Corporate Finance Manual

HM Revenue & Customs
, see all updates

Debt cap: groups affected: dual listed groups

Groups headed by more than one listed entity

When some groups merge, rather than reorganising the group so that all subsidiaries are held under one ultimate parent, the group retains two separate listed entities at the head of the structure. These top companies will have separate shareholders and each will have their own subsidiaries (although there may be some common ownership of some subsidiaries).

However, the two parent companies and their groups will operate as a single economic enterprise and constitute a single reporting entity when preparing consolidated accounts. They will also generally have a shared board of directors and arrange matters so that dividend payments to the shareholders of each listed entity are calculated by reference to the results of the single merged group.

These groups form, economically and commercially, one enterprise. Thus the debt cap rules contain provision at TIOPA10/S343 that they are treated as a single worldwide group. The dual corporate parents of the group will be treated as a single corporate entity where:

  • they not subsidiaries of the same entity, but
  • are treated as under IAS as a single economic entity by reason of being a business combination achieved by contract.