SSE checker

Because several SSE conditions turn on facts that owners often haven't measured, such as the exact percentage held through a period or how much of a company's activity is non-trading. Choosing 'not sure' doesn't count against you. It moves the result to 'Possibly: check first' and adds a note explaining what to check. That's usually more useful than guessing, because one wrong answer can change the verdict and the tax at stake is 25% of the gain.

You'll see it when nothing you've answered rules SSE out, but at least one point needs confirming. That happens if you answer 'not sure' to any condition, or if you say the buyer is connected with the seller, because the trading test then also applies immediately after the sale. The list under 'What to check' sets out each open point. A clear 'no' to any main condition gives 'SSE looks unlikely' instead.

The substantial shareholding exemption is a corporation tax relief, so it only applies when a company sells shares in another company. If you own the shares yourself, the gain is subject to capital gains tax at 18% or 24% in 2026/27, and Business Asset Disposal Relief may reduce the rate to 18% on up to £1m of lifetime gains. The sale structure comparison sets a personal sale against a sale through a holding company.

It multiplies the gain you enter by the 25% main rate of corporation tax. If the verdict is likely, that's the tax SSE would save; if unlikely, it's roughly the tax that could be due. It's a simple guide: it doesn't apply marginal relief for a company with small profits, indexation allowance up to December 2017, or any capital losses the company could set against the gain if SSE doesn't apply.

No. The seller must have held at least 10% throughout a continuous 12-month period beginning no more than six years before the day of the sale. So a company that has already sold down below 10% can still qualify on a later sale, provided an earlier 12-month period of 10% ownership falls within that six-year window. The checker asks this as a single question, so answer 'not sure' if the dates are close.

Things like holding surplus cash beyond the trade's needs, investment portfolios, and property let to outsiders. HMRC look at indicators rather than one percentage: non-trading income, the value of non-trading assets, expenses and staff time, and the company's history. Where none of them suggests non-trading activity above about 20%, HMRC say the case is unlikely to need detailed review. If any indicator is close, answer 'not sure' and measure it properly.

Normally the company sold only has to be trading up to the sale. Where the buyer is connected with the selling company, for example a company under the same control, the company sold must also be a trading company immediately after the sale. The checker flags this as a point to check rather than a failure.

No. The requirement for the selling company itself to be trading, or a member of a trading group, was removed for disposals on or after 1 April 2017. The checker therefore asks only about the company being sold, which must be a trading company or the holding company of a trading group. A holding company that also holds cash or investments can still sell a trading subsidiary under SSE, though its own position matters for other reliefs.

Usually, yes. Where the subsidiary received assets from another group company within the previous six years at no gain and no loss, a degrouping charge can arise when it leaves the group. That charge is added to the selling company's proceeds for the shares, so if SSE applies to the share sale it normally covers the degrouping gain too. The checker mentions this when the result is likely but doesn't calculate it.

The expected sale price less the selling company's base cost in the shares, which is usually what it paid for them or subscribed. If your holding company acquired the shares through a share-for-share exchange, its base cost needs confirming, because it may not be the same as your own. The figure is used only to show the corporation tax at stake, so a reasonable estimate is fine for a first look.

Neither on its own. The selling company needs at least 10% of the ordinary share capital of the company sold, and that holding must also carry at least 10% of the profits available for distribution and 10% of the assets on a winding up. Votes don't come into it. Holdings with unusual rights, such as shares that carry capital but little income, can fail even above 10%, so answer 'not sure' if your share classes differ.

Look at the reason listed under 'Why it may not apply'. Some failures can be fixed with time, such as completing a 12-month holding period or reducing non-trading activity well before a sale. Others point to a different route, such as shareholders selling the holding company instead, which the sale structure comparison sets out. If SSE doesn't apply, the gain is taxed at the company's corporation tax rate and any loss can be allowable.

It depends on timing. The company sold must have been trading from the start of the latest 12-month period used to meet the holding test until the sale, so a subsidiary that began trading recently may not qualify yet. Special rules can help where a trade is moved into a new subsidiary from elsewhere in the group before the sale, known as a hive-down, but the checker doesn't cover them.

Yes. SSE applies to any disposal of shares by a company that meets the conditions, not only a sale of the whole holding. What matters is that at least 10% was held through a 12-month period in the six years before the sale and that the company has been trading. Remember that selling part of a subsidiary can take it out of a 75% group, which can bring degrouping and SDLT clawback charges.

No. Where at least 25% of the selling company's ordinary share capital is held by qualifying institutional investors, such as pension schemes, life assurance businesses, charities or investment trusts, special rules apply. A holding below 10% can count if it cost at least £20m, and the trading condition can be relaxed in full or in part. The checker is built for owner-managed groups, so it doesn't ask about these rules.