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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Groups: rebasing: elections out of kink test: no group election

There are only two exceptions to the rule that an election covers all companies which are members of the group at the relevant time.

  • The first exception in TCGA92/SCH3/PARA8 (3) is the time expired company. This is the comparatively rare case of a company which joins the group after 5 April 1988 having previously made a disposal to which Section 35 applies but without an election having been made in relation to the company, and after the time limit for making the election has expired. In effect the company or its former principal company has let the time limit run out and there are no circumstances in which an election can apply to the company.
  • The second exception in TCGA92/SCH3/PARA8 (4) is where an outgoing company leaves the group before the election is made. An outgoing company is not covered by an election made after it has left the group. Any company which leaves the group after the relevant time and after the election is made will continue to be covered by the election.