Section 31: Arrangement for Transfers of Companies
Summary
1.Section 31 makes a specific change to the types of arrangements that are exempt from the anti-avoidance rules affecting the group relief rules contained in Part 5 of the Corporation Tax Act 2010 (CTA 2010). The section also corrects cross-reference errors in sections 154(3) and 155(3) of CTA 2010.
Details of the Section
2.The section amends section 156 of CTA 2010 which provides the definition of ‘arrangements’ for the purposes of the anti-avoidance rules in sections 154 and 155. These sections ensure, for example, that if there are arrangements providing a specific date on which a company can leave a group and come under the control of another that no group relief can flow.
3.Subsection (1)(b) inserts new sub-paragraph (ii) to section 156(2)(b). The paragraph extends the exclusion of what is not treated as arrangements to include conditions and requirements imposed by, or agreed with, Ministers or statutory bodies.
4.Subsection (1)(c) inserts new subsection (2A) which provides a definition of statutory body for the purposes of section 156(2).
5.Subsection (2) corrects the reference to section 154A in sections 154(3) and 155(3) to section 155A.
6.Subsection (3) provides that the changes made by the section are for accounting periods ending on or after 1 April 2013.
Background
7.Currently some statutory public bodies set down conditions or requirements for companies (who are members of wider groups) operating in specific sectors, which mean they are inadvertently caught by the anti-avoidance rules in sections 154 to 156 of CTA 2010 preventing the flow of group relief.
8.For accounting periods ending on or after 1 April 2013, any such conditions imposed by, or agreed with, a statutory public body will not be arrangements that prevent the flow of group relief.
