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HMRC internal manual

Venture Capital Schemes Manual

HM Revenue & Customs
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CVS: investors and reliefs: non-financial activities requirement: group company

FA00/SCH15/PARA10(3) & (4)(a)

The requirements in the case of a company that is a member of a group and is not the parent of that group are that:

  • the group is a non-financial trading group (see VCM91150), and
  • the company exists wholly for the purpose of carrying on a non-financial trade (for definition see VCM91140).

In determining whether the company exists wholly for that purpose the following are to be disregarded:

  • purposes which have no significant effect on the extent of the company’s activities, except in relation to incidental matters,
  • the holding of shares in a subsidiary, and the making of loans to other group companies,
  • the holding and managing of property used by any group company for the purposes of a non-financial trade,
  • the holding of any shares to which investment relief is attributable - unless the holding of such shares forms a substantial part (see VCM91170) of the company’s business.