(1)Where a close company (“the transferor company”) is a member, but not the principal [F1company], of a group and—
(a)a disposal by the transferor company of any asset is a disposal to which section [F2171(1) of the 1992 Act] applies and is also a transfer of value, and
(b)the transfer of value has only a small effect on the value of the minority participators’ rights and interests in that company compared with its effect on the value of the other participators’ rights and interests in the company,
the rights and interests of the minority participators shall be left out of account in determining the respective rights and interests of the transferor company’s participators for the purpose of apportioning the value transferred under section 94 above.
(2)For the purposes of subsection (1) above—
(a)[F3Section [F2170 of the 1992 Act] (groups of companies: definitions) applies as for the purposes of sections [F2171 to 181] of that Act], and
(b)a minority participator is a participator of the transferor company who is not, and is not a person connected with, a participator of the principal [F4company] of the group or of any of the principal [F4company’s] participators;
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F5
Textual Amendments
F1Finance Act 1989 s. 138(6)(a),with effect from 14March 1989.Originally
“member”.
F2Words in s. 97 substituted (6.3.1992 with effect as mentioned in s. 289(1)(2) of the substituting Act) by Taxation of Chargeable Gains Act 1992 (c. 12), ss. 289, 290, Sch. 10 para. 8(4)(b) (with ss. 60, 101(1), 201(3)).
F3Finance Act 1989 s. 138(6)(b),with effect from 14March 1989.Originally
“the principal member of a group is the member of which all the other members are 75 per cent subsidiaries”.
F4Finance Act 1989 s. 138(6)(a),with effect from 14March 1989.Originally
“member”
and
“member's”
respectively.
F5 Repealed by Finance Act 1989 s. 138(6)(c)and Sch.17 Part VII,with effect from 14March 1989.
Modifications etc. (not altering text)
C1S. 97 amended (28.7.2000 with effect on or after 1.4.2000) by 2000 c. 17, s. 102, Sch. 29 paras. 1, 14