Valid from 22/07/2004
9(1)This paragraph applies where a company (“company A”) ceases to be a member of the same group as another company (“company B”) but the companies remain under the control of the same person or persons.
This is referred to below as “degrouping”.
(2)If at the end of any accounting period of company A ending on or after the degrouping but no more than two years after the degrouping—
(a)company A has excess NCDs that (apart from this paragraph) cannot be allocated to other companies,
(b)the business activities of company A and any other companies in the same group as that company are negligible, and
(c)the business activities of company B and any other companies in the same group as that company are not negligible,
the provisions of sub-paragraphs (3) to (5) below apply.
The end of the accounting period when the above conditions are met is referred to in those provisions as “the relevant time”.
(3)Company B and any other companies in the same group as that company at the relevant time (the “B group”) shall be treated for the purposes of allocating the excess NCDs as if they were members of the same group as company A.
(4)Any excess NCDs remaining after any allocation made by virtue of sub-paragraph (3) must be allocated—
(a)to company B or, if different, the company in the B group that at the relevant time has the greatest number of members who are not companies, and
(b)to the accounting period of that company that includes the relevant time.
This allocation is not subject to the restrictions in paragraph 7 on the amount that may be allocated to another company.
(5)If there is more than one company answering the description in sub-paragraph (4)(a), the excess NCDs shall be apportioned between them according to the amount of their basic profits for the accounting period to which the amount falls to be allocated.
(6)In this paragraph “control” shall be construed in accordance with section 416(2) to (6).