INTM620760 - Offshore Receipts in respect of Intangible Property (ORIP): Glossary of terms: Meaning of Control Groups
ITTOIA05/Ch2A/S608S
Control groups
To be a part of the same control group for the purposes of this chapter, two persons must, at any point in time, meet any one of three conditions:
- The two persons are consolidated for accounting purposes for a period which includes that time.
- One person has a 51% investment in the other at that time (See example 2).
- A third person has a 51% investment in both of them at that that time (See example 3).
Consolidated for accounting purposes
Two or more persons are consolidated for accounting purposes if any one of the following applies:
- Their financial results for the period are required to be comprised in group accounts.
- Their financial results for the period would be required to be comprised in group accounts but for the application of an exemption.
- Their financial results for the period are comprised in group accounts (See example 4).
Example 2
Throughout the accounting period ending 31 December 2020, Company A holds 60% of shares in Company B. These shares give an equal entitlement to voting rights. Company A and Company B are part of the same control group for this accounting period.
Example 3
Throughout the accounting period ending 31 December 2020, Company C holds 55% of shares in Company D and Company E. These shares give an equal entitlement to voting rights. These three companies are part of the same control group for this accounting period.
Example 4
Company A and Company B have comprised their financial results in group accounts for accounting period ending 31 December 2020. These two companies are part of the same control group for this period.
Meaning of group accounts
In this section group accounts means accounts prepared under
- Section 399 of the Companies Act 2006, or
- Any corresponding provision of the law of a territory outside the UK.