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Meaning of groups for utilisation of surplus ACT

In the surplus ACT regulations, a group means a parent company resident in an EEA state¹ together with all its 51% subsidiaries which are resident in the UK.

A company cannot be a parent company if it is a 51% subsidiary of another UK resident company². The normal rules to determine whether a company is a 51% subsidiary apply (see D2.106)³, but ownership (directly or indirectly) of share capital is ignored if it is held as trading stock or in a non-resident company⁴.

In considering whether a company is a 51% subsidiary, the holding of ordinary share capital may sometimes not be an appropriate test, eg where persons, whether members or not, enjoy special rights or powers. In such a case, holdings of all kinds of share capital and any special powers etc may be taken into account⁵.

A company is not a 51% subsidiary at a time when there are arrangements in existence under which one or more persons