Finance (No. 3) Act 2010

Ability to claim group relief where link company established in the EEA E+W+S+N.I.

2 In section 129 (overview of Chapter), in subsection (2), for “Sections 130 to 134” substitute “ Sections 130 to 134A ”. E+W+S+N.I.

3 In section 130(2) (group relief claims on amounts surrenderable under Chapter 2), in Requirement 3— E+W+S+N.I.

(a) in paragraph (c), for “section 133(1), (3) and (4)” substitute “ section 133(1) and (3) to (8) ”, and

(b) in paragraph (d), for “section 133(2), (3) and (4)” substitute “ section 133(2) to (8) ”.

4 (1) Section 133 (conditions to be met for consortium claims for group relief) is amended as follows. E+W+S+N.I.

(2) In subsection (1)—

(a) omit the “and” at the end of paragraph (e), and

(b) for paragraph (f) substitute—

“(f) the surrendering company and the claimant company are both UK related, and

(g) the link company is UK related or established in the EEA.”

(3) In subsection (2)—

(a) omit the “and” at the end of paragraph (e), and

(b) for paragraph (f) substitute—

“(f) the surrendering company and the claimant company are both UK related, and

(g) the link company is UK related or established in the EEA.”

(4) After subsection (4) insert—

“(5) Subsection (6) applies where the link company—

(a) is established in the EEA, but

(b) is not UK related.

(6) Neither consortium condition 2 nor consortium condition 3 is met unless the link company is a member of the same group of companies as the other company mentioned in subsection (1)(d) or (2)(d) without the involvement of a relevant company.

(7) A “relevant company” is a company that is not established in the EEA.

(8) For the purposes of subsection (6) a company (“A”) is a member of the same group of companies as another company (“B”) without the involvement of a relevant company if—

(a) in a case where A is the 75% subsidiary of B, B owns at least 75% of A's ordinary share capital otherwise than through a relevant company,

(b) in a case where B is the 75% subsidiary of A, A owns at least 75% of B's ordinary share capital otherwise than through a relevant company, and

(c) in a case where neither company is the 75% subsidiary of the other but both are 75% subsidiaries of a third company, the third company—

(i) is not a relevant company, and

(ii) owns at least 75% of A's ordinary share capital, and at least 75% of B's ordinary share capital, otherwise than through a relevant company.”

5 After section 134 (meaning of “UK related” company) insert— E+W+S+N.I.

“134A Companies “established in the EEA”

(1) For the purposes of section 133 a company is established in the EEA if—

(a) it is constituted under the law of the United Kingdom or an EEA territory, and

(b) it has its registered office, central administration or principal place of business within the European Economic Area.

(2) In this section “EEA territory”, in relation to any time, means a territory outside the United Kingdom that is within the European Economic Area at that time.”

6 (1) Section 146 (maximum amount of group relief in consortium claims) is amended as follows. E+W+S+N.I.

(2) In subsection (3)—

(a) omit the “and” at the end of paragraph (a), and

(b) after that paragraph insert—

“(aa) assuming that the link company was UK related, and”.

(3) In subsection (6), at the end insert “ , assuming that the link company was UK related. ”

(4) In subsection (8)—

(a) omit the “and” at the end of the definition of “consortium claim”, and

(b) at the end insert “, and

UK related”, in relation to a company, has the meaning given by section 134.”