Paragraph 7

For section 179(1B) and (1C) (de-grouping charge) substitute—

“(1B)

Where, as part of the process of a merger to which section 140E applies, a company which is a member of a group (“Group 1”) ceases to exist and in consequence of that cessation—

(a)

assets are transferred to the transferee, or

(b)

shares in one or more companies which were also members of the group are transferred to the transferee,

a company which has ceased to exist, or the shares in which have been transferred to the transferee, shall not be treated for the purposes of this section as having left Group 1.

(1C)

If subsection (1B) applies in relation to a company then for the purposes of this section—

(a)

the transferee and a company which has ceased to exist in consequence of the merger shall be treated as the same entity, and

(b)

if the transferee is a member of a group (“Group 2”) following the merger (whether or not as the principal company of the group) a company which was a member of Group 1 and became a member of Group 2 in consequence of the merger shall be treated, for the purposes of this section, as if Group 1 and Group 2 were the same.

(1D)

In subsections (1B) and (1C), “transferor” and “transferee” have the meaning given by section 140E(9).”.