CIRD40545 - Intangible assets: groups:
degrouping: when is there a relevant connection between
groups?
FA02/SCH29/PARA59 (3)
Introduction
FA02/SCH29/PARA59 (2) only applies in situations where there is
a ‘relevant connection’ between the first and second
groups referred to in
CIRD40540. Paragraph 59 (3) contains
the rules for establishing whether such a connection exists for
these purposes. This involves looking at who controls the principal
company of the second group when the company in question (the
‘chargeable company’) leaves that group.
The rules are modelled on provisions designed to counter
complex arrangements designed to avoid a degrouping charge under
the CG provisions.
Relevant connection
There is a relevant connection between two groups if, when
the chargeable company ceases to be a member of the second group,
the principal company of the second group is under the control of
any person or persons within cases (a), (b), (c) or (d) below.
Cases
- the company which is the principal company
of the first group,
- if the first group no longer exists, the
company which was the principal company of the first group when the
chargeable company left it,
- any person or persons who control the
company referred to in (a) or (b), or who have had that company
under their control at any time since the chargeable company ceased
to be a member of the first group, or
- any person or persons who have, at any time
in the period since the chargeable company ceased to be a member of
the first group, had under their control:
either
- a company which would have been a person
within (c) above if it had continued to exist,
or
- a company which, if it had continued to
exist, would have been a person falling within this case (d)
whether:
- by virtue of controlling a company that
would have fallen within case (c), or
- by virtue of controlling a company or
series of companies falling within case (d).
