In certain circumstances, such as its being acquired by another
company, the principal company of a group may itself become a
member of another group.
If at any time the principal company of a group becomes a
member of another group, the first group and the other group are
regarded as the same. But this does not mean that every member of
the target group necessarily becomes a member of the new enlarged
group.
Take the case where the principal company X of one group
becomes a member, but not a wholly owned subsidiary, of another
group headed by principal company Y. Any company Z which was a
member of X's group but is not an effective 51% subsidiary of Y
will cease to be a member of a group for the purposes of Schedule
29. This is so, even though X's group and Y's group are deemed to
be the same group.
The effect of the special rules that apply in this case is that
there is no immediate degrouping adjustment on Z when Z leaves the
X/Y group by virtue of x becoming a member of Y’s group.
There may, however, be an equivalent charge at a later stage
if Z ceases to satisfy the ‘qualifying condition’ that
it is:
of one or more companies in the group headed by company Y, see CIRD40560.
