CG17953f - Taper relief:trading company and holding company of a trading group - periods before 17 April 2002 - meaning of "trading group"

TCGA92/SchA1/Para22 (1) defines a trading group as "a group of companies the activities of which (if all the activities of the companies in the group are taken together) do not, or not to any substantial extent, include activities carried on otherwise than in the course of, or for the purposes of, a trade". The focus here is on the actual activities of the group in determining non-trading purposes rather than those activities that a group might be permitted to engage in.

The expression "all the activities taken together" in the definition of trading group should be taken as meaning that all intra-group activities are disregarded for the purpose of the financial tests. So, for example, where one group company lets a property to another group company, the letting activity would be disregarded. However, this netting off approach would not be extended to transactions with qualifying joint venture companies (other than 51% subsidiaries), so letting property to a JVC would be an investment activity.