{
  "url": "https://openlegislation.uk/finance-act-1940/schedule-5/paragraph-6",
  "json_url": "https://openlegislation.uk/finance-act-1940/schedule-5/paragraph-6.json",
  "legislation": "ukpga/Geo6/3-4/29",
  "legislation_title": "Finance Act 1940",
  "legislation_url": "https://openlegislation.uk/finance-act-1940",
  "path": "schedule/5/paragraph/6",
  "kind": "paragraph",
  "number": "6",
  "heading": null,
  "text": "(1) Subject to the provisions of sub-paragraph (2) of this paragraph, if a body corporate becomes or ceases to be a subsidiary member of a particular group of companies—\n(a) no relief shall be given in respect of deficiencies of profits occurring before that event by any reduction of any profits arising after that event ; and\n(b) no relief shall be given in respect of deficiencies of profits occurring after that event by any reduction of any profits arising before that event.\n(2) If it is Established in the case of a body corporate that it has a deficiency of profits for any chargeable accounting period during which it was a member of a group of companies, the principal company of the group may require that the deficiency, so far as it is not absorbed in reducing the aggregate amount of the profits chargeable to excess profits tax of that member for previous chargeable accounting periods, shall be applied in whole or in part in reducing any other profits on which the principal company is assessable to excess profits tax, and relief from excess profits tax shall be given accordingly ; and to the extent that any deficiency is so applied, it shall not be available for reducing any profits chargeable to excess profits tax of the said member for any period.\nThe reference in this sub-paragraph to profits on which the principal company is assessable includes profits on which it is assessable for any chargeable accounting period, whether or not n that chargeable accounting period the principal company is the principal company of the group.\n(3) So much of any provision of Part III of this Act as prevents a deficiency of profits being taken into account in so far as it occurs while the trade or business was being carried on neither in the United Kingdom nor by a person ordinarily resident in the United Kingdom shall not apply if the trade or business was being carried on by a body corporate which was then a member of a group of companies.\n(4) For the purposes of this paragraph a group of companies shall be deemed to be the same group notwithstanding any changes in the members thereof so long as, and only so long as, the same body corporate remains the principal company of the group.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "C",
      "label": "C1",
      "text": "Sch. 5 para. 6(2) excluded, 4 & 5 Geo. 6. c. 30. s. 42, sch. 4, para. 1 ; 8 & 9 Geo. 6. c. 24. s. 5(3)"
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/ukpga/Geo6/3-4/29/schedule/5/paragraph/6",
    "retrieved_at": "2026-10-29T11:31:12.189827+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}