Commentary

D1.8101 Groups of companies

Corporate tax
Corporate tax | Commentary

D1.8101 Groups of companies

Corporate tax | Commentary

D1.8101 Groups of companies

Transfers within groups

Special rules apply to achieve tax-neutrality in relation to intra-group transfers1. These rules apply when:

  1.  

    (a)     a company (A) which is a party to a derivative contract is replaced directly or indirectly by another company (B), where the two companies are members of the same group and are within the charge to corporation tax2. For this purpose a group is a parent company and its 75% subsidiaries3

  2.  

    (b)     the replacement occurs as a result of a series of transactions which have the same effect as a related transaction between A and B where each of A and B was a member of the same group at any time in the course of the series of transactions4

  3.  

    (c)     B becomes a party to a derivative contract which contains5:

    1.  

      (1)     equivalent rights to those of a contract to which A has ceased to be a party; or

    2.  

      (2)     equivalent obligations to those of such a contract; or

    3.  

      (3)     for a contract made by B after 8 April 2003, equivalent rights and obligations to those of such a contract

Amortised cost basis of accounting

A is deemed to have disposed of the derivative contract at what would have been the carrying value of the derivative contract for the purposes of the derivative

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial