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Conditions applicable to both direct and indirect demergers

The following conditions must be met for both direct and indirect mergers:

1. Ìý

   (a)ÌýÌýÌýÌý all relevant companies¹ involved in the distribution must be resident in the UK or an EU member state² 'Relevant company' includes the distributing company, each subsidiary whose shares are transferred and each transferee company,

2. Ìý

   (b)ÌýÌýÌýÌý at the time of the distribution the distributing company must be a trading company or a member of a 75% trading group and each of its 75% subsidiaries involved in the distribution must be trading companies or the holding company of a trading group³. A member means a holder of ordinary share capital. A holding company means one whose business (ignoring any trade which it carries on) consists wholly or mainly of the holding of shares or securities of one or more companies which are its 75% subsidiaries,

3. Ìý

   (c)ÌýÌýÌýÌý the distribution must be made wholly or mainly for the purpose of benefiting some or all of the trading activities which before the distribution were carried