Finance Act 1967

Companies joining or leaving group or consortium

7 Subject to paragraph 8 below, group relief shall be given if, and only if, the surrendering company and the claimant company are members of the same group, or fulfil the conditions for relief for a consortium, throughout the whole of the surrendering company's accounting period to which the claim relates, and throughout the whole of the corresponding accounting period of the claimant company.

8 (1) This paragraph has effect where on any occasion two companies become or cease to be members of the same group.

(2) For the purposes specified below it shall be assumed as respects each company that on that occasion (unless a true accounting period of the company begins or ends then) an accounting period of the company ends, and a new one begins, the new accounting period to end with the end of the true accounting period (unless before then there is a further break under this sub-paragraph), and—

(a) that the losses or other amounts of the true accounting period are apportioned to the component accounting periods on a time basis according to their lengths, and

(b) that the amount of total profits for the true accounting period of the company against which group relief may be allowed in accordance with paragraph 5(1) of this Schedule is also so apportioned to the component accounting periods.

(3) Where the one company is the surrendering company and the other company is the claimant company—

(a) references to accounting periods, to profits, and to losses, allowances, expenses of management or charges on income of the surrendering company, in paragraphs 1 to 4 of this Schedule shall be construed in accordance with sub-paragraph (2) above,

(b) references to accounting periods in paragraphs 6 and 7 of this Schedule shall be so construed (so that if the two companies are members of the same group in the surrendering company's accounting period, they must under paragraph 6 also be members of the same group in any corresponding accounting period of the claimant company),

(c) references to profits, and amounts to be set off against the profits, in the said paragraph 6 shall be so construed (so that an amount apportioned under sub-paragraph (2) above to a component accounting period may fall to be reduced under the said paragraph 6(2)).

(4) This paragraph shall apply with the necessary modifications where a company begins or ceases to fulfil the conditions for relief for a consortium, either as a surrendering company or as a claimant company, as it applies where two companies become or cease to be members of the same group.