(1)The general rule is that—
(a)a company (“A”) and all its 75% subsidiaries form a group, and
(b)if any of those subsidiaries have 75% subsidiaries, the group includes them and their 75% subsidiaries, and so on.
(2)A is referred to in this Chapter and in Chapter 9 as the principal company of the group.
(3)Subsections (1) and (2) are subject to the following provisions of this Chapter.
(1)A group of companies does not include any company (other than the principal company of the group) that is not an effective 51% subsidiary of the principal company of the group.
(2)For the meaning of “effective 51% subsidiary”, see section 771.
(1)The general rule is that a company (“A”) is not the principal company of a group if it is itself a 75% subsidiary of another company (“B”).
(2)That rule is subject to subsection (3).
(3)A is the principal company of a group (“group C”) if—
(a)A and B are prevented from being members of another group by section 766,
(b)the requirements of sections 765 and 766 are met in relation to group C, and
(c)A being the principal company of group C does not enable a further company to be the principal company of a group of which A would be a member.
(1)A company cannot be a member of more than one group.
(2)If, apart from subsection (1), a company (“A”) would be a member of 2 or more groups, the group of which it is a member is determined by applying the rules in subsections (4), (6), (7) and (8) successively in that order until an answer is obtained.
(3)In those subsections the principal company of each group is referred to as its head.
(4)A is a member of the group of which it would be a member if in applying section 766 (only effective 51% subsidiaries of principal company to be members of group) the amounts specified in subsection (5) were ignored.
(5)Those amounts are—
(a)any amount to which a head of a group is beneficially entitled of any profits available for distribution to equity holders of a head of another group (see section 772), and
(b)any amount to which a head of a group would be beneficially entitled of any assets of a head of another group available for distribution to its equity holders on a winding up (see that section).
(6)A is a member of the group the head of which is beneficially entitled to a percentage of the profits available for distribution to A’s equity holders that is greater than the percentage of those profits to which any other head of a group is so entitled.
(7)A is a member of the group the head of which would be beneficially entitled to a percentage of any of A’s assets available for distribution to its equity holders on a winding up that is greater than the percentage of those assets to which any other head of a group would be so entitled.
(8)A is a member of the group the head of which owns directly or indirectly a percentage of A’s ordinary share capital that is greater than the percentage of that capital owned directly or indirectly by any other head of a group.
(9)Section 838(2) to (10) of ICTA applies for the interpretation of subsection (8) as it applies for the interpretation of section 838(1)(a) of that Act (definition of “51% subsidiary”).
(1)A group of companies remains the same group of companies for the purposes of this Part so long as the same company is the principal company of the group.
(2)If the principal company of a group becomes a member of another group—
(a)the groups are treated as the same group for the purposes of this Part, and
(b)the question whether a company has ceased to be a member of a group must be determined accordingly.
(3)The passing of a resolution or the making of an order, or any other act, for the winding up of a company is not treated for the purposes of this Part as causing any company to cease to be a member of any group of which it is a member.
(1)This section applies if the principal company of a group (“Group 1”)—
(a)becomes an SE as a result of being the acquiring company in the formation of an SE by merger by acquisition (in accordance with Articles 2(1), 17(2)(a) and 29(1) of Council Regulation (EC) No 2157/2001 on the Statute for a European company),
(b)becomes a subsidiary of a holding SE (formed in accordance with Article 2(2) of that Regulation), or
(c)is transformed into an SE (in accordance with Article 2(4) of that Regulation).
(2)For the purposes of this Part—
(a)Group 1 and any group of which the SE is a member on formation is treated as the same, and
(b)the question whether a company has ceased to be a member of a group must be determined accordingly.
(1)For the purposes of this Part a company (“the subsidiary”) is an effective 51% subsidiary of another company (“the parent”) if (and only if) conditions A and B are met.
(2)Condition A is that the parent is beneficially entitled to more than 50% of any profits available for distribution to equity holders of the subsidiary (see section 772).
(3)Condition B is that the parent would be beneficially entitled to more than 50% of any assets of the subsidiary available for distribution to its equity holders on a winding up (see section 772).
(1)Schedule 18 to ICTA (group relief: equity holders and profits or assets available for distribution) applies for the purposes of sections 768 and 771.
(2)In that Schedule as it applies for those purposes—
(a)for any reference to sections 403C and 413(7) of ICTA, or either of those provisions, substitute a reference to sections 768 and 771,
(b)omit the words in paragraph 1(4) from “but” to the end, and
(c)omit paragraphs 5(3), 5B to 5F and 7(1)(b).
(1)In applying the definition of “75% subsidiary” in section 838 of ICTA for the purposes of this Chapter, any share capital of a registered industrial and provident society is treated as ordinary share capital.
(2)Section 170(12) to (14) of TCGA 1992 (application to certain statutory bodies of provisions relating to groups of companies) applies for the purposes of this Chapter as it applies for the purposes of sections 171 to 181 of TCGA 1992.