| Commentary

24 Introduction

| Commentary

D: GROUPS OF COMPANIES

24 Introduction

Where one company takes over another by share purchase, the first company will become the holding (or ‘parent’) company of the second, which in its turn will become a subsidiary (in most cases, a ‘wholly-owned’ or ‘100% subsidiary’1). This effectively creates a company group for the purposes of corporation tax and for chargeable gains, as well as for stamp duty and stamp duty land tax. Where the target company itself has subsidiaries, the group will operate on three levels, holding company, subsidiary company and sub-subsidiary companies. (Company groups may come about in other ways.)

Where a

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