Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
, see all updates

Groups: group relief: arrangements, effect 1

CTA10/S154(3) effect 1

Effect 1 in CTA10/S154(3) is that there are arrangements in place of any kind (whether or not in writing) whereby a company, or a successor to it , could:

  • cease to be a member of the same group as a second company,

and

  • become a member of the same group as a third company.

This is subject to exclusions for certain commercial arrangements as set out in CTA10/Ss155A and 155B (CTM80181), and to the definition of arrangements in CTA10/S156(2)(b) (CTM80165)

‘Successor’

One company is a successor of another if it carries on, in whole or in part, a trade which the other company has ceased to carry on in certain circumstances where a balancing charge would not be chargeable on the ceasing company – CTA10/S156(3).  The circumstances are where:

  • CTA10/Part 22/Chapter 1 (transfers of trade without a change of ownership) applies in relation to the companies as, respectively, the successor and the predecessor within the meaning of that Chapter, or
  • the two companies are connected with each other in accordance with CTA10/S1122.

‘Third company’ (CTA10/S154(4))

This means a company which, ignoring the effect of any arrangements is not a member of the same group as the company in CTA10/S154 to which the arrangements refer.