Part 5Electricity generator levy

Groups, partnerships and joint ventures

287Groups

1

For the purposes of this Part, the following form a “group”—

a

a company that is not a 75% subsidiary of any other company, and

b

every company that is a 75% subsidiary—

i

of that company,

ii

of a 75% subsidiary of that company, or

iii

of a 75% subsidiary of a 75% subsidiary of that company, and so on.

2

The company in a group that is not a 75% subsidiary of any other company is the “principal member” of the group.

3

Every other member of the group is a “subsidiary member”.

4

A company (“B”) is a “75% subsidiary” of another company (“A”) if—

a

A is beneficially entitled to 75% or more of any profits available for distribution to equity holders of B,

b

A would be beneficially entitled to 75% or more of any assets of B available for distribution to its equity holders on a winding-up, or

c

at least 75% of B’s ordinary share capital is owned directly or indirectly by A.

5

Where as a result of the application of each of paragraphs (a) to (c) of subsection (4) a company would (ignoring this paragraph) be a member of more than one group, that company is to be treated as only being a 75% subsidiary of the first company it is a subsidiary of applying the rules in those paragraphs in order (starting with paragraph (a)).

6

If at any time a company that is a generating undertaking becomes a member of a group that is a generating undertaking (including a group that becomes a generating undertaking as a result of that company becoming a member), the final qualifying period of the company ends at that time.

7

If at any time a group ceases to be a group as a result of the principal member becoming a 75% subsidiary of another group, the final qualifying period of the group ends at that time.