Taxes Consolidation Act 1997 section 418

Beneficial percentage

Section 418 explains how a company's beneficial percentage entitlement in another company's profits or assets may be traced through a chain of intermediate companies.

• Section 418 applies for the purposes of sections 412 and 414 to 417, which deal with group relief and related conditions.
• A company's beneficial entitlement to profits or assets of another company includes both direct holdings and indirect holdings through one or more intermediate companies.
• The beneficial percentage is calculated by combining a company's direct stake with its proportionate share of stakes held through other companies in the chain.
• This tracing rule means that a parent company's indirect percentage in a subsidiary can be built up by multiplying ownership percentages at each link in the chain.

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