Part 23 Company distributions

Chapter 3 Matters which are not distributions

Purchase of own shares: supplementary

1047 Meaning of “group” and “51% subsidiary” in sections 1033 to 1047
(1) In this section and sections 1033 to 1046 “group” (except in the expression “trading group”) means a company which has one or more 51% subsidiaries but is not itself a 51% subsidiary of any other company, together with those subsidiaries.
This is subject to subsection (2).
(2) If the whole or a significant part of the business carried on by an unquoted company (“the successor company”) was previously carried on by—
(a) the company making the purchase, or
(b) a company which is, apart from this subsection, a member of a group to which the company making the purchase belongs,
the successor company and any company of which it is a 51% subsidiary are treated as being members of the same group as the company making the purchase (whether or not, apart from this subsection, the company making the purchase is a member of a group).
(3) But subsection (2) does not apply if the successor company first carried on the business in question more than 3 years before the time of the purchase.
(4) For the purposes of this section and sections 1033 to 1046, a company which has ceased to be a 51% subsidiary of another company before the time of the purchase is treated as continuing to be a 51% subsidiary of that company if at the time of the purchase there exist arrangements under which it could again become such a subsidiary.