Groups: rebasing: elections out of kink test: takeover
If P acquires T before the relevant time for the P group there are three main possibilities.
Example 1: election previously made by tIf an election made by T already covers all the companies in the T group, none of the T group companies is an incoming company in relation to the P group. TCGA92/SCH3/PARA9 (1)(b) would not apply to make the acquisition of the T group the relevant time for the P group. All the T group companies would remain covered by the election by T. Company P has the right to make its own election at any time before 6 April 1990, or after the first disposal to which Section 35 applies by a member of the P group (taking account of the rules for outgoing and incoming companies).
Example 2: Takeover after relevant time of target group but before election made for target groupA member of the T group, say T1, has made a disposal to which Section 35 applies before the acquisition by P, but T has not made an election and the time limit for making an election has not expired.
T1 is an incoming company in relation to the P group. The acquisition of T1 establishes the relevant time of the P group under TCGA92/SCH3/PARA9 (1)(b). The disposal by T1 is now the first relevant disposal of the P group under TCGA92/SCH3/PARA8 (5)(b).
The right to make the election passes from T to P. The effect of TCGA92/SCH3/PARA8 (2) is that any election by P will cover all the companies in the P/T group, because all these companies are members of the enlarged group at the relevant time.