78Aggregation of interests

78 Aggregation of interests (1) An entity has an aggregate interest in a corporation if the entity has— (a) a direct interest and 1 or more indirect interests in the corporation; or (b) more than 1 indirect interest in the corporation. (2) The value of the aggregate interest of an entity in a corporation is worked out by adding together the following: (a) the value of the direct interest (if any) of the entity in the corporation;

(b) the value of each indirect interest of the entity in the corporation. An entity has a direct interest (with a value of 40%) in corporation B. The entity also has a direct interest (with a value of 25%) in corporation A, which in turn has a direct interest (with a value of 60%) in corporation B. Accordingly, the entity also has an indirect interest in corporation B with a value of 15% (that is, 25%  60%). The value of the entity’s aggregate interest in corporation B is the total of the direct interest (40%) and the indirect interest (15%), which is 55%. Accordingly, the entity has a controlling interest in corporation B under s 73 (Groups arising from tracing of interests in corporations).