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To be regarded as members of the same group, a parent company must be beneficially entitled to not less than 75% (or 90% in the case of consortium relief involving holding companies of trading subsidiaries, see D2.208) of the profits available for distribution to the equity holders of the subsidiary company. See D2.205 for further details on the definition of a group for group relief purposes.

The percentage of profits so available for distribution to an equity holder (see below) is determined by reference to their beneficial entitlement in the relevant accounting period¹ and on the basis that the total profits (see below) of the subsidiary company were fully distributed.

The profit distribution test depends on the rights that attach to shares or securities. The test becomes more complex if these rights are limited or vary, or if there are option rights. See D2.250.