Taxation of Chargeable Gains Act 1992 Schedule 7ZA paragraph 14

Meaning of "direct interest company" and "relevant corporate partner"

Paragraph 14 defines two key terms — "direct interest company" and "relevant corporate partner" — used in determining how corporate partnership structures are treated for chargeable gains purposes.

• A company is a "direct interest company" in relation to a person (P) if it is either company A (the company whose activities through a partnership are being considered) or a company in which P directly holds ordinary share capital.
• A company is a "relevant corporate partner" if a direct interest company in relation to P owns some portion of its ordinary share capital, whether directly, indirectly, or a combination of both.
• The relevant corporate partner must also be a member of the same group of companies as the direct interest company and must itself be a member of the partnership in question.
• Indirect ownership of share capital is determined in accordance with section 1155 of the Corporation Tax Act 2010, which sets out how ownership through chains of companies is traced.