CG73847 - Non-Resident Capital Gains Tax (NRCGT) – Disposals on or after 6 April 2015 to 5 April 2019: Companies: Special rules: Companies joining and leaving pooling groups
TCGA92/S188F explains the circumstances in which a company may join an active pooling group. A company which is eligible to become a member of an NRCGT group may elect to do so; it is eligible if it is a member of the potential pooling group and meets the qualifying conditions. If a company holding a UK residential property asset throughout a period of 12 months is eligible to become a member of a NRCGT group, but does not elect to do so, it is not eligible to become a member of that group after the end of the period. But that ban is lifted if at any time the company no longer holds all or part of the original UK residential property asset, but holds another such asset.
TCGA92/S188G sets out what happens when a member company of an NRCGT group ceases to be a member. In that case the legislation provides for a ‘depooling charge’. This is calculated on the basis that the company is treated for the purposes of TCGA and TMA as having made a disposal, immediately before it ceased to be a member of the group, of the UK residential property assets it held directly before it became a member of the group, and immediately reacquired the assets at their market value at the time.
No charge arises where -
- a company ceases to be a member of the pooling group in consequence of another member of that group ceasing to exist;
- all the companies that are members of a group cease to be members, because of an event which causes the principal company of the pooling group to cease to be a closely-held company, or the head of a subgroup of which they are members to cease to be a closely-held company or to become a member of another group;
- a company which is a member of a group ceases to be a member of the pooling group by reason of the principal company of the pooling group becoming a member of another group.