Section 783 — Corporation Tax Act 2009: Certain associated companies leaving group at the same time

Certain associated companies leaving group at the same time 783 1 Where two companies cease to be members of a group at the same time, section 780 does not apply in relation to a transfer by one of the companies to the other if condition A or B is met. 1A Condition A is that the companies—

a are both 75% subsidiaries and effective 51% subsidiaries of another company on the date of the transfer, and b remain both 75% subsidiaries and effective 51% subsidiaries of that other company until immediately after they cease to be members of the group. 1B Condition B is that one of the companies—

a is both a 75% subsidiary and an effective 51% subsidiary of the other on the date of the transfer, and b remains both a 75% subsidiary and an effective 51% subsidiary of the other until immediately after the companies cease to be members of the group.

2 This subsection applies if—

a a company (“ the transferee ”) that is a member of a group of companies (“the first group”) acquires an asset from another company (“ the transferor ”) which is a member of that group at the time of the transfer, b the transferee ceases to be a member of the first group, c subsection (1) applies in relation to the transferee ceasing to be a member of the first group (so that section 780 does not apply),

d the transferee subsequently ceases to be a member of another group of companies (“the second group”),

and e there is a relevant connection between the two groups (see section 784).

3 If subsection (2) applies, section 780 applies in relation to the transferee ceasing to be a member of the second group as if both companies had been members of the second group at the time of the transfer.

4 This section is subject to section 789 (merger carried out for genuine commercial reasons).