Part 8Intangible fixed assets

Chapter 9Application of this Part to groups of companies

Reallocation of degrouping charge within group and recovery

796Interpretation of section 795

1

For the purposes of section 795 and this section—

  • “the relevant accounting period” is the accounting period in which the degrouping charge falls to be brought into account by A,

  • “the relevant time” is—

    1. a

      in a case within section 780, when A ceased to be a member of the group,

    2. b

      in a case within section 785, when A ceased to meet the qualifying condition (within the meaning of that section), and

    3. c

      if there has been an election under section 792, the time that would have been the relevant time under paragraph (a) or (b) had there been no such election, and

  • “the relevant asset” is the asset in respect of which the degrouping charge arises.

2

For the purposes of section 795 the amount of corporation tax referable to a degrouping charge is the difference between—

a

the tax in fact payable for the relevant accounting period, and

b

the tax that would have been payable for that period in the absence of the degrouping charge.

3

References in section 795 and this section to a degrouping charge are to—

a

a credit required to be brought into account under section 780(3) or 785(4), or

b

if there has been an election under section 792, a credit required to be brought into account as a result of the election.

4

In section 795 and this section—

  • “director”, in relation to a company—

    1. a

      has the meaning given by section 67(1) of ITEPA 2003 (read with section 67(2) of that Act) and

    2. b

      includes any person falling within section 417(5) of ICTA (read with section 417(6) of that Act),

  • “controlling director”, in relation to a company, means a director of the company who has control of it, and

  • “group” and “principal company” have the meaning that would be given by Chapter 8 if in that Chapter for references to 75% subsidiaries there were substituted references to 51% subsidiaries.

5

In subsection (4) “control” has the meaning given by section 416(2) to (6) of ICTA.