Corporation Tax Act 2009

Disregard of payments between group members for reliefs

799 Disregard of payments between group members for reliefs

(1) If a payment for group roll-over relief or for the reallocation of a degrouping charge does not exceed the amount of the relevant relief—

(a) it is not taken into account in calculating profits or losses of either of the companies involved for corporation tax purposes, and

(b) it is not a distribution for any of the purposes of the Corporation Tax Acts.

(2) A payment for group roll-over relief is a payment made—

(a) in connection with a claim for relief under Chapter 7 (roll-over relief in case of realisation and reinvestment) made because of—

(i) section 777 (relief on realisation and reinvestment: application to group member), or

(ii) section 779 (rules that apply to cases within section 778(1)),

(b) by the company whose proceeds of realisation are reduced as a result of the claim,

(c) to a company whose acquisition costs are reduced (in a case within section 777) or the tax written-down value of whose assets is reduced (in a case within section 779) as a result of the claim, and

(d) in accordance with an agreement between those companies in connection with the claim.

(3) A payment for the reallocation of a degrouping charge is a payment made—

(a) in connection with an election under section 792 (reallocation of charge within group),

(b) by the company to which the chargeable realisation gain accrues,

(c) to the company to which as a result of the election the whole or part of that gain is treated as accruing, and

(d) in accordance with an agreement between those companies in connection with the election.

(4) In the case of a payment in connection with such a claim for relief as is mentioned in section 777(3), the amount of the relevant relief is the amount of the reduction, as a result of the claim, in the acquisition costs of the company to which the payment is made.

(5) In the case of a payment in connection with such a claim for relief as is mentioned in section 778(4), the amount of the relevant relief is the amount of the reduction, as a result of the claim, in the tax written-down value of the assets of the company to which the payment is made.

(6) In the case of a payment in connection with an election under section 792, the amount of the relevant relief is the amount treated as a result of the election as accruing to the company to which the payment is made.