Finance Act 1975

4 (1) The provisions of this paragraph shall have effect for the purposes of the principal section and the preceding provisions of this Schedule in any case where—

(a) one or more companies (in this paragraph referred to as " the transferee company or companies ") forming part of a group of companies acquires or acquire trading stock from one or more other companies (in this paragraph referred to as "the transferor company or companies") forming part of the same group ; and

(b) the acquisition occurs during the 1973 accounting period of the transferee company or companies or, if paragraph 1(1) above applies in relation to that company or those companies, during the 1973 reference period; and

(c) the acquisition referred to in paragraph (a) above takes place in consequence or as part of a reconstruction, reorganisation, change in trading arrangements or other scheme which is carried out by companies forming part of the group of companies concerned and which results in a reduction in the trading stock held by one or more of those companies and a corresponding increase in the trading stock held by the other or others.

(2) If a claim for relief under the principal section is made by the transferee company or the transferor company or, as the case may be, by any of the transferee companies or transferor companies, then the company claiming relief and all other companies which—

(a) are either transferee companies or transferor companies, and

(b) have the same 1973 accounting period as the company claiming relief,

shall be treated as one company for the purpose of determining the aggregate of the relief to which they are entitled under the principal section:

Provided that if paragraph 1(1) above applies in relation to the company claiming relief, another company shall not be treated as falling within paragraph (b) above unless paragraph 1(1) above also applies in relation to that other company and both that company and the company claiming relief have the same 1973 reference period.

(3) For the purpose specified in sub-paragraph (2) above, any reference in the principal section or in the preceding provisions of this Schedule to the value of a company's stock at any time or to its trading income for any period shall be construed as a reference to the aggregate of the values of stocks at that time or, as the case may be, the aggregate of the trading incomes for that period, of all the companies which, for that purpose, are treated as one by virtue of that sub-paragraph.

(4) Where the aggregate of the relief to which two or more companies are entitled under the principal section has been determined in accordance with sub-paragraphs (2) and (3) above, the relief shall be apportioned between them so that the relief to which any one of them is so entitled bears to the relief to which the other or others is or are so entitled the same proportion as the closing stock value of that one of them bears to the closing stock value or values of the other or others.

(5) For the purposes of this paragraph, companies shall be treated as forming part of a group of companies if and only if they would be deemed to be members of the group for the purposes of section 258 of the Taxes Act (group relief).