CTSA: group relief: simplified arrangements: termination of arrangement and exclusion of a company from arrangement
Regulations 9 & 11 SI1999/2975
The Board also has power to terminate a simplified arrangement. It is expected that situations that warrant the use of the Board’s power will not be common.
You should give notice of termination if you become aware that there are no longer any companies in the group which are members of the same group (CTM97680) as the authorised company.
An agreement may also be brought to an end where the group as a whole is failing to respect the rules of the agreement, or that it is seriously failing to comply with its taxation obligations generally. Such a sanction of entirely withdrawing a simplified arrangement will be an unusual step. If you think it is warranted make a report to CTISA (Technical), see ‘Technical Help’ on the left bar, before taking any action.
Regulation 9 allows an officer of the Board to exclude a particular company from the simplified arrangement. You can do this where that company:
- is no longer part of the group (CTM97680),
- has failed to comply with its obligations under the Corporation Tax Acts, or
- has become a company in relation to which a person is acting as an insolvency practitioner.
For this purpose an insolvency practitioner means a liquidator, provisional liquidator, administrator, administrative receiver or a supervisor of a voluntary arrangement under Part I of the Insolvency Act 1986. This reflects our view that the appointment of an insolvency practitioner causes the previous owners of a company to lose control of it, breaking the group relationship.
Any case where exclusion is being considered on the basis of the second bullet should be referred to CTISA (Technical), see ‘Technical Help’ on the left bar.