Revenue Note for Guidance

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Revenue Note for Guidance

418 Beneficial percentage

This section provides that a beneficial entitlement may be traced through a chain of companies.

For the purposes of section 412 and 414 to 417, a company’s beneficial percentage entitlement in another company means its entitlement by virtue of any shares it holds in that other company together with its entitlement by virtue of shares in other companies which themselves hold shares in that other company.


If company A holds 50 per cent of the shares in company B, and also 50 per cent of the shares in company C, while Company C holds the other 50 per cent of company B, then A’s percentage of B (provided section 417 does not apply) is —

Own holding

50 per cent

50 per cent of C’s holding, (i.e. 50 per cent of 50 per cent)

25 per cent

A’s holding in B is, therefore

75 per cent

Company A therefore qualifies under the 75 per cent test in relation to Company B.

Relevant Date: Finance Act 2021