Finance Act 2006

Groups

134 Group Real Estate Investment Trusts

(1) A group of companies may become a group to which this Part applies; and for that purpose the provisions of this Part apply to a group of companies in the same way as to a company, subject to the modifications set out in Schedule 17.

(2) For the purposes of this Part a company (“the principal company”) and all its 75% subsidiaries form a group; and if any of those subsidiaries have 75% subsidiaries the group includes them and their 75% subsidiaries, and so on.

(3) But a group does not include—

(a) a company (other than the principal company) which is not an effective 51% subsidiary of the principal company,

(b) an insurance company,

(c) an insurance subsidiary, or

(d) an open-ended investment company.

(4) In this section—

(a) “effective 51% subsidiary” has the meaning given by section 170 of TCGA 1992 (groups of companies),

(b) “75% subsidiary” has the meaning given by section 838 of ICTA (subsidiaries),

(c) “insurance company” has the meaning given by section 431(2) of ICTA, and

(d) “insurance subsidiary” means a company in which 75% or more of the ordinary shares are held by one or more insurance companies.

(5) A company cannot be a member of more than one group; and if a company would be a member of more than one group, section 170(6) of TCGA 1992 (capital gains tax: groups) shall apply to determine the group of which it is a member.

(6) Subsection (5) is subject to section 138.

135 Transfer within group

After section 171(2)(d) of TCGA 1992 (transfer within a group: exclusions) insert— “; or

(da) a disposal by or to a company to which Part 4 of the Finance Act 2006 applies (Real Estate Investment Trusts);”.

136 Availability of group reliefs

(1) In the application of a provision specified in subsection (2) to a group to which this Part applies G (property rental business) shall be treated as a separate group (distinct from—

(a) G (pre-entry),

(b) G (residual), and

(c) G (post-cessation)).

(2) The provisions mentioned in subsection (1) are—

(a) sections 171 and 171A of TCGA 1992 (actual or notional transfer of assets within group),

(b) sections 179A and 179B of TCGA 1992 (reallocation or roll-over of gain within a group),

(c) Chapter 4 of Part X of ICTA (corporation tax: group relief),

(d) Schedule 9 to FA 1996 (loan relationships),

(e) Schedule 26 to FA 2002 (derivative contracts), and

(f) Schedule 29 to FA 2002 (intangible assets).