(1)If two or more companies that are associated (see section 788(3)) cease to be members of a group at the same time, section 780 does not apply in relation to a transfer between them.
(2)This subsection applies if—
(a)a company (“the transferee”) that is a member of a group of companies (“the first group”) acquires an asset from another company (“the transferor”) which is a member of that group at the time of the transfer,
(b)the transferee ceases to be a member of the first group,
(c)subsection (1) applies in relation to the transferee ceasing to be a member of the first group (so that section 780 does not apply),
(d)the transferee subsequently ceases to be a member of another group of companies (“the second group”), and
(e)there is a relevant connection between the two groups (see section 784).
(3)If subsection (2) applies, section 780 applies in relation to the transferee ceasing to be a member of the second group as if both companies had been members of the second group at the time of the transfer.
(4)This section is subject to section 789 (merger carried out for genuine commercial reasons).