Taxation (International and Other Provisions) Act 2010

[F1 Effect of group-EBITDA (chargeable gains) election U.K.

Textual Amendments

F1 Pt. 10: the existing Pt. 10 renumbered as Pt. 11 (except for ss. 375, 376 which are repealed), the existing ss. 372-374, 377-382 renumbered as ss. 499-507 and a new Pt. 10 (ss. 372-498) inserted (with effect in accordance with Sch. 5 para. 25(1)-(3) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 5 para. 1, 10(1)(2)(a)(3) (with Sch. 5 paras. 27, 32-34)

422 Group-EBITDA (chargeable gains) election U.K.

(1) Where a group-EBITDA (chargeable gains) election has effect in relation to a period of account of a worldwide group (“the relevant period of account”), this Chapter applies in relation to the period subject to this section.

(2) Section 419 (the capital (disposals) adjustment) has effect as if—

(a) the definition of C in subsection (1) of that section did not apply, and

(b) instead, C were defined for the purposes of that section as—

(i) the sum of any relevant gains, less

(ii) the sum of any relevant losses,

or, where that is a negative amount, nil.

(3) For the purposes of this section, there is a “relevant gain” or “relevant loss” where condition A or B is met.

(4) Condition A is that a member of the group disposes of a relevant asset during the relevant period of account.

(5) Condition B is that—

(a) a member of the group ceases to be a member of the group during the relevant period of account, and

(b) the member held a relevant asset immediately before ceasing to be a member of the group.

(6) Where condition A is met, the amount of the relevant gain or relevant loss is the amount of the chargeable gain or allowable loss that would, on the assumptions in subsection (8), accrue to the member on the disposal.

(7) Where condition B is met, the amount of the relevant gain or relevant loss is the amount of the chargeable gain or allowable loss that would, on the assumptions in subsection (8), accrue to the member if the member—

(a) disposed of the relevant asset immediately before ceasing to be a member of the group, and

(b) received such consideration for that disposal as it is just and reasonable to attribute to it, having regard to the consideration received by the group for its interests in the member.

(8) The assumptions mentioned in subsections (6) and (7) are that—

(a) all members of the group are within the charge to corporation tax;

(b) Schedule 7AC to TCGA 1992 (exemptions for disposals by companies with substantial shareholdings) is of no effect;

(c) Part 2 (double taxation relief) is of no effect.

(9) Where—

(a) the sum of any relevant losses, exceeds

(b) the sum of any relevant gains,

the amount of the excess is treated as a relevant loss in relation to the period of account of the group immediately after the relevant period of account.

(10) In this section “relevant asset” does not include shares in (or other interests giving an entitlement to share in the profits of) a member of the group.]