Qualifying Company
20/05/1987
Query
(1) Whether non-trading activities or income which arises as an incidental to the carrying on of the trade e.g. interest on cash flow, rents from letting part of the conpany's trading premises etc..., or (2) Whether incidental shareholdings in other companies, be they subsidiaries, suppliers, or customers; would be regarded as diluting the companies 100% existence for trading purposes. or (3) Whether the holding of lands and buildings by a holding company, which are used by its subsidiary companies, would be regarded as affecting the "wholly" provision of this section.
Decision
(1) No; (2) No, provided such holdings are part of the natural trading environment in which the company operates and provided the holdings are for the purposes related to the trade. (3) No, so long as the holding company retains ownership and the land and buildings were used by the subsidiary companies throughout the relevant period.
Income Tax
Section 495 (3), Taxes Consolidation Act, 1997
Origin: Direct Taxes International and Administration
File ref:991/87