Capital gains group definition: group continuity following takeover
TCGA92/S170(10) makes it clear that a capital gains group remains the same group so long as the same company remains the principal company of the group. Otherwise it might be argued that acquiring (or losing) a subsidiary changes the identity of the group.
Perhaps more importantly, TCGA92/S170(10) also deals with the situation where the principal company of one group is taken over by another company. When the principal company of one group becomes a member of another group then the first group and the other group are “regarded as the same”. This is of particular importance in ensuring that degrouping charges are not triggered when an entire group is taken over. Even so, it is possible that for a member of the first group to fail the 51% effective ownership test by reference to the principal company of the enlarged group. The degrouping rules are modified to deal with this, see CG45410 (special rule 2).