½Û×ÓÊÓƵ

D1.1010 Substantial shareholding requirement

In order to qualify for the substantial shareholding exemption (SSE), the investing company must have held a substantial shareholding in the target company throughout a continuous 12-month period beginning not more than six years before the date of disposal¹.

Note that this holding period only applies to the qualifying substantial shareholding itself — the ownership period of any other holding of shares (eg preference shares, or ordinary shares in excess of the substantial shareholding requirement) or an interest in shares can be less than 12 months. The holding period test is modified for a deemed disposal on entry to the qualifying asset holding company (QAHC) regime, see 'Corporation tax consequences of becoming a QAHC' at D7.115 and on transfers within groups which contain a QAHC, see D7.120.

In most cases a substantial shareholding means a holding of more than 10%² of the ordinary share capital (see D2.108) in conjunction with a beneficial entitlement to not less than 10% of both the profits available for distribution to equity holders and the assets available