Finance Act 2003

Recovery of group relief from another group company or controlling director E+W+S+N.I.

5 (1) This paragraph applies where— E+W+S+N.I.

(a) tax is chargeable under paragraph 3 (withdrawal of group relief),

(b) the amount so chargeable has been finally determined, and

(c) the whole or part of the amount so chargeable is unpaid six months after the date on which it became payable.

(2) The following persons may, by notice under paragraph 6, be required to pay the unpaid tax—

(a) the vendor;

(b) any company that at any relevant time was a member of the same group as the purchaser and was above it in the group structure;

(c) any person who at any relevant time was a controlling director of the purchaser or a company having control of the purchaser.

(3) For the purposes of sub-paragraph (2)(b)—

(a) a “relevant time” means any time between the effective date of the relevant transaction and the purchaser ceasing to be a member of the same group as the vendor; and

(b) a company (“company A”) is “above” another company (“company B”) in a group structure if company B, or another company that is above company B in the group structure, is a 75% subsidiary of company A.

(4) In sub-paragraph (2)(c)—

• “director”, in relation to a company, has the meaning given by section 67(1) of the Income Tax (Earnings and Pensions) Act 2003 (c. 1) (read with subsection (2) of that section) and includes any person falling within section 417(5) of the Taxes Act 1988 (read with subsection (6) of that section); and

• “controlling director”, in relation to a company, means a director of the company who has control of it (construing control in accordance with section 416 of the Taxes Act 1988).