OpenLegislation

Section 783 Certain associated companies leaving group at the same timeC1F2

United Kingdom

F1(1)

Where two companies cease to be members of a group at the same time, section 780 does not apply in relation to a transfer by one of the companies to the other if condition A or B is met.

(1A)

Condition A is that the companies—

(a)

are both 75% subsidiaries and effective 51% subsidiaries of another company on the date of the transfer, and

(b)

remain both 75% subsidiaries and effective 51% subsidiaries of that other company until immediately after they cease to be members of the group.

(1B)

Condition B is that one of the companies—

(a)

is both a 75% subsidiary and an effective 51% subsidiary of the other on the date of the transfer, and

(b)

remains both a 75% subsidiary and an effective 51% subsidiary of the other until immediately after the companies cease to be members of the group.

(2)

This subsection applies if—

(a)

a company (“the transferee”) that is a member of a group of companies (“the first group”) acquires an asset from another company (“the transferor”) which is a member of that group at the time of the transfer,

(b)

the transferee ceases to be a member of the first group,

(c)

subsection (1) applies in relation to the transferee ceasing to be a member of the first group (so that section 780 does not apply),

(d)

the transferee subsequently ceases to be a member of another group of companies (“the second group”), and

(e)

there is a relevant connection between the two groups (see section 784).

(3)

If subsection (2) applies, section 780 applies in relation to the transferee ceasing to be a member of the second group as if both companies had been members of the second group at the time of the transfer.

(4)

This section is subject to section 789 (merger carried out for genuine commercial reasons).

Annotations

Textual amendments

F1

S. 783(1)-(1B) substituted (19.7.2011) for s. 783(1) (with effect in accordance with Sch. 10 para. 9 of the amending Act) by Finance Act 2011 (c. 11), Sch. 10 para. 7(3)

F2

Words in s. 783 heading substituted (19.7.2011) (with effect in accordance with Sch. 10 para. 9 of the amending Act) by Finance Act 2011 (c. 11), Sch. 10 para. 7(3)

Modifications

C1

Pt. 8 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)

Notes on Part 8

Modifications

C1

Pt. 8 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 6(1)

C2

Pt. 8 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)

C3

Pt. 8 modified (1.10.2011) by Postal Services Act 2011 (c. 5), s. 93(2)(3), Sch. 2 para. 6(1); S.I. 2011/2329, art. 3

C4

Pt. 8 modified (15.11.2011 for specified purposes, 30.3.2012 for E.W.) by Localism Act 2011 (c. 20), ss., 240(5)(o), Sch. 24 para. 1(3); S.I. 2012/628, art. 3(b)

C5

Pt. 8 modified (1.4.2012) by Budget Responsibility and National Audit Act 2011 (c. 4), s. 29, Sch. 4 para. 3(1); S.I. 2011/2576, art. 5

C7

Pt. 8 modified (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 35, 45 (with Sch. 5 para. 36)