»Ê¹ÚÌåÓýapp

Entrepreneursâ€� Relief was renamed in Finance Act 2020 with effect from 6 April 2020. »Ê¹ÚÌåÓýapp new name is generally used in this guidance but should be read as applying to times before that date.

»Ê¹ÚÌåÓýapp following guidance is relevant only to the time before 18 March 2015.

Qualifying shareholding in a joint venture company

A qualifying shareholding in a joint venture company is defined in TCGA92/S165A(14).

A company is a joint venture company if 75% of its ordinary share capital is held by not more than 5 persons.

A qualifying shareholding is a holding of 10% or more of the ordinary share capital of the joint venture company.

Also, S165A(13) provides that the activities of a joint venture company that is a holding company and its 51% subsidiaries are to be treated as a single business. This means that intra-group activities (e.g. intra-group property rentals) are to be disregarded.

A company may have a qualifying shareholding in a joint venture company which is not in the same group as the investing company. In that case, in determining whether (a) the investing company is a trading company, (b) a group that the investing company is a member of is a trading group, or (c) the investing company is the holding company of a trading group, the following rules apply:-

• the holding of any shares or securities that the company holds in the joint venture company is disregarded, and
• the company is treated as carrying on a proportion of the activities of the joint venture company equal to the proportion of the latter company’s ordinary share capital which it holds.