Finance Act, 1984

Application to subsidiaries.

26.—(1) A qualifying company may in the relevant period have one or more subsidiaries if—

(a) the conditions in subsection (2) are satisfied in respect of the subsidiary or each subsidiary and, except as provided in subsection (3), continue to be so satisfied until the end of the relevant period; and

(b) the subsidiary or each subsidiary was incorporated in the State and is a company—

(i) falling within section 15 (2) (a), or

(ii) which exists solely for the purpose of carrying on wholly or mainly in the State any trade which consists solely of any one or more of the following trading operations—

(I) the purchase of goods or materials for use by the qualifying company or its subsidiaries,

(II) the sale of goods or materials produced by the qualifying company or its subsidiaries,

or

(III) the rendering of services to or on behalf of the qualifying company or its subsidiaries.

(2) The conditions referred to in subsection (1) (a) are—

(a) that the qualifying company possesses all the issued share capital of, and all the voting power in, the subsidiary; and

(b) that no other person has control of the subsidiary within the meaning of section 158 of the Corporation Tax Act, 1976 ; and

(c) that no arrangements are in existence by virtue of which the conditions in paragraphs (a) and (b) could cease to be satisfied.

(3) The conditions referred to in subsection (1) (a) shall not be regarded as ceasing to be satisfied by reason only of the subsidiary or the qualifying company being wound up or dissolved without winding up if—

(a) it is shown that the winding up or dissolution is for bona fide commercial reasons and not part of a scheme or arrangement the main purpose or one of the main purposes of which is the avoidance of tax; and

(b) the net assets, if any, of the subsidiary or, as the case may be, the qualifying company are distributed to its members before the end of the relevant period, or in the case of a winding up, the end (if later) of three years from the commencement of the winding up.

(4) Where a qualifying company has one or more subsidiaries in the relevant period this Chapter shall have effect subject to the Second Schedule .