HC Deb 03 June 1965 vol 713 cc2083-5
Mr. Patrick Jenkin

I beg to move, Amendment No. 628, in page 57, line 45, at the end to add: (8) Where a company is a subsidiary of another company which is resident in the United Kingdom (hereafter in this section referred to as "the principal company") the principal company may, by notice in writing given to the Commissioners of Inland Revenue, before the expiration of any accounting period of the subsidiary or within two months thereafter require that the provisions of subsection (9) of this section shall apply to that subsidiary as respects that period and all subsequent accounting periods throughout which it continues to be a subsidiary of the principal company. (9) Where such a notice is given the profits or losses in any accounting period to which the notice relates from the trade or business carried on by the subsidiary shall be treated, for the purposes of the Corporation Tax, as if they were profits or losses arising in the corresponding accounting period from the trade or business carried on by the principal company.

The Chairman

With this we can take Amendment No. 621, in Clause 50, page 61, line 42, at end insert: (9) (a) Where a company resident in the United Kingdom is a subsidiary of another company which is so resident and which carries on the same trade or business as the first-mentioned company (hereafter in this section referred to as "the principal company ") the principal company may, by notice in writing given to the Board before the expiration of any accounting period of the subsidiary or within six months thereafter or such longer period as the Board may in any case allow, require that the provisions of paragraph (b) of this subsection shall apply to the subsidiary as respects that period and all subsequent accounting periods throughout which it continues to be a subsidiary of the principal company. (b) Where such a notice is given, the profits or losses arising in any accounting period to which the notice relates from the trade or business carried on by the subsidiary shall be treated, for the purpose of computing the corporation tax chargeable in that period, as if they were profits or losses arising in the corresponding accounting period from the trade or business carried on by the principal company. (c) For the purpose of this subsection—

  1. (i) a company shall be deemed to be a subsidiary of another company if and so long as not less than ninety-five per cent. of its ordinary share capital is owned by that other company, whether directly or through another company or other companies, or partly directly and partly through another company or other companies, and the amount of ordinary share capital of one company owned by a second company through another company or other companies, or partly directly and partly through another company or other companies, shall be determined in accordance with the provisions of Part I of Schedule (Provisions relating to Subsidiary Companies) to this Act:
  2. (ii) an accounting period of a subsidiary shall be deemed to correspond to such accounting period of the principal company as the Board may determine.
(d) In this section and Part I of the said Schedule references to ownership shall be construed as references to beneficial ownership, and the expression "ordinary share capital", in relation to a company, means all the issued share capital (by whatever name called) of the cornpany, other than capital the holders whereof have a right to a dividend at a fixed rate or a rate fluctuating in accordance with the rate of corporation tax for the time being in force but have no other right to share in the profits of the company. (e) The provisions of paragraph (a) of this subsection relating to the giving of a notice by a principal company as respects a subsidiary shall have effect subject to the provisions of Part II of the said Schedule. and Amendment No. 620:

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