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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
Updated
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Groups: rebasing: elections out of kink test: company joining/leaving

Where a single company joins or leaves a group the results of the rules for elections out of the kink test are as follows.

SITUATION RESULT
   
Company already covered by election. Election continues to apply company.
Company not covered by election and time limit expired. Company will not be covered by any future election.
Company not covered by election  
Time limit has not expired  
Company has made a relevant disposal.  
* Company joins group Before its relevant time. The disposal is the new group’s first relevant disposal. The right to elect passes to the new principal company.
* Company joins new group after its relevant time, or is no longer grouped. Company retains right to elect.
Company not covered by election.  
Company has not made a relevant disposal.  
* Company joins new group before its relevant time. The right to elect passes to the new principal company.
* Company joins new group after its relevant time, or is no longer grouped. Company retains right to elect.

Any disposal made by an outgoing company is not treated as the first relevant disposal of the group. Any election subsequently made by the group’s principal company, and taking effect from a relevant time before the outgoing company left the group, does not cover that company.