Commentary

D2.252 Group relief—meaning of 'arrangements', 'successor' and 'control'

Corporate tax
Corporate tax | Commentary

D2.252 Group relief—meaning of 'arrangements', 'successor' and 'control'

Corporate tax | Commentary

D2.252 Group relief—meaning of 'arrangements', 'successor' and 'control'

The terms 'arrangements', 'successor' and 'control' are specifically defined for the purposes of the provisions restricting group relief when companies leave a group.

Meaning of 'arrangements' for the purposes of denying group relief

'Arrangements' (of any kind, whether or not in writing1) will fall within the provisions at D2.251 if they:

  1.  

    •     involve two companies in a group and the arrangements could (broadly) have the effect of allowing2:

    1.  

      –     the first company (or any successor) to leave one group and join another at some time during or after the current period

    2.  

      –     a person/persons (other than the first or second company) to have or obtain control of the first company but not of the second company at some time during or after the current period, or

    3.  

      –     a third company to start to carry on the whole or a part of a trade (as a successor to the trade) at some time during or after the current period, where at a time during the current period the trade was carried on by the first company, or

  2.  

    •     involve a trading company and a consortium and the arrangements could (broadly) have the effect of allowing3:

    1.  

      –     the trading company (or any successor) to become a 75% subsidiary of a third company, at some time during or after the current period

    2.  

      –     any person who owns less than 50% of the ordinary share capital of the trading company to have or obtain control of the

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