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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

HM Revenue & Customs
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Enterprise Management Incentives (EMI): Qualifying companies: Trading activities requirement for a parent company

Where the company is the parent of a group, the business of the group must not consist to any substantial extent of carrying on activities other than qualifying activities. At least one company in the group must meet the same conditions as those described for a single company (see ETASSUM52080). The business of the group means all the activities of the companies in the group taken together.

In determining whether a group company exists for the required purpose, the following intra-group activities are disregarded:

  • holding shares in or securities of, or making loans to, another company in the group (Paragraph 14(3)(a)),
  • holding and managing property used for a qualifying trade carried on by a group company (Paragraph 14(3)(b)), and
  • incidental activities of a company which meets the trading activities requirement for a single company (Paragraph 14(3)(c)).