CG45450 - Charge on companies leaving groups: exclusions: two company group practice

The Board have given an assurance that degrouping charges will not be imposed (except in emigration cases) on assets transferred to the parent of a two company group which disposes of its single subsidiary. This undertaking has been publicised by the Consultative Committee of Accountancy Bodies in Technical Release 386 dated 31 March 1980 which states

`We should be grateful for confirmation that the Revenue will not seek to apply Section 278 ICTA1970 (company leaving a group) to assets transferred to a holding company of a group consisting of that company and one subsidiary when the subsidiary leaves the group.

The Revenue confirmed that they would not normally seek to apply Section 278, except where the parent company emigrated, thereby causing the group to break up.'

ICTA70/S278 was consolidated as TCGA92/S178 and TCGA92/S179.

From 1 April 2000, non-resident companies may be members of a group (CG45120). So the emigration of a parent company will not break the group relationship with its subsidiaries, and no degrouping charges will arise.