Revenue Note for Guidance

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Revenue Note for Guidance

492 Qualifying subsidiaries


This section provides for the conditions to be met in order for a subsidiary of a qualifying company to be a qualifying subsidiary


(1) As set out in section 490, a qualifying company may, upon certain conditions being satisfied , have one or more qualifying subsidiaries. In order for a subsidiary company to be a qualifying subsidiary it must satisfy the following conditions

  • It must throughout the relevant period be an unquoted company resident in the State or an EEA State, and be a company which carries on relevant trading activities from a fixed place of business in the State, or
  • It must throughout the relevant period exist solely for the purpose of carrying on a trade which consists of any one or more of the following trading operations -
    • The purchase of goods or material for use by the qualifying company or its subsidiaries,
    • The sale of goods or materials produced by the qualifying company or its subsidiaries, or
    • The rendering of services to or on behalf of the qualifying company or its subsidiaries.

In addition to the above the following conditions must also be satisfied -

  • (2) The subsidiary must be a 51 per cent subsidiary of the qualifying company,
  • No other person must have control of the subsidiary within the meaning of section 11 (that is, no other person must be able, by means of their shareholding or voting power or by means of powers conferred by the articles of association, to secure that the affairs of the company are conducted in accordance with that person’s wishes),
  • Arrangements must not exist whereby these conditions could cease to apply.

(3) These conditions must be satisfied until the end of the relevant period, but will not be regarding as having been breached merely because, within that period, the holding company, or a subsidiary of that company, is wound up (or dissolved without winding up) for bona fide commercial reasons and not as part of a tax avoidance device. Where this happens the assets of the company must be distributed to its members before the end of the relevant period or within 3 years of the winding up, whichever is later.

Where a qualifying company has one or more subsidiaries in the relevant period, this Part applies subject to Schedule 10, which contains other detailed adjustments to cater for a company with qualifying subsidiaries.

Relevant Date: Finance Act 2021