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HMRC internal manual

Employment Related Securities Manual

Securities with Artificially Enhanced Value

Dependent subsidiary pre-16 April 2003 - meaning of dependent subsidiary

The status of a subsidiary company is determined by reference to a period of account, and a subsidiary company will be a dependent subsidiary company unless each of the four conditions in FA88/S86 (1) is satisfied for the period of account.

The first two conditions (ERSM61030) concern the conduct of the company’s business during the period of account. The third and fourth conditions (ERSM61040) concern the company’s requirement to give a certificate after the end of the period of account.

If any of the conditions is not satisfied the company is a dependent subsidiary for the period of account.