Group relief in relation to transactions carried out in
preparation for an acquisition to which section 75 Finance Act 1986
(acquisition relief) applies.
Concern has been expressed that because the transactions are
carried out in preparation for the acquisition there may be
‘arrangements’ which deny the availability of group
relief under FA03/SCH7/PARA2
There are two relevant types of arrangements:
In many acquisitions to which FA1986/S75 will apply both a
change of control and a de- grouping will occur.
Paragraph 2(1) ends with a proviso to the effect that
arrangements entered into with a view to an acquisition to which
FA1986/S75 applies are not ‘control’ arrangements
denying group relief. Paragraph 2(2)(b) does not include a similar
proviso. Paragraph 2 must be read as a whole and the proviso must
apply also to paragraph 2(2)(b), otherwise it would in practice be
of no effect. It is accepted that arrangements entered into with a
view to an acquisition to which FA1986/S75 applies are not
‘de-grouping’ arrangements denying group relief.
