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HMRC internal manual

Corporate Finance Manual

Interest restriction: groups, periods and financial statements: the worldwide group: stapled entities


Some groups may have issued stapled stock: a combination of securities are traded together as one security on a stock exchange. A special purpose vehicle (SPV) might, for example, own a property which is managed by a company with the shares in the SPV being stapled to the shares in the management company.

Investors would therefore acquire shares in both the SPV and the management company making the shareholders of both entities the same. The stapling of the entities effectively makes them a single enterprise, both economically and commercially and the rules provide they are treated as such when looking at the ultimate parent of a worldwide group.

Deemed parent

S477 makes a provision for this situation by applying TIOPA10/PT10 as if the stapled entities were consolidated subsidiaries of an ultimate parent (the ‘deemed parent’). This ensures all the stapled entities are included in the same group instead of each stapled entity heading up their own group as would otherwise be the case.

Meaning of ‘stapled’

Shares or other interests in one entity are ‘stapled’ to shares or other interests in others if the shares or other interests of the entities are in practice always traded together. Dealing in all stapled entities at the same time need not be obligatory; it can simply be advantageous because of the nature of rights attached to the shares.


The shares in company A include an obligation that on acquisition, shares must also be acquired in company B and company C. There are similar obligations which deal with the disposal of shares. All three entities are therefore stapled entities and will be treated as having a deemed parent meaning they all fall in the same worldwide group.