50(1)A UK sub-group of a foreign group falls within this Part if—U.K.
(a)the sub-group has persistently engaged in unco-operative behaviour (see paragraphs 36 to 38),
(b)some or all of the unco-operative behaviour has caused there to be, or contributed to there being, two or more significant tax issues in respect of the sub-group or members of the sub-group which are unresolved (see paragraph 39), and
(c)there is a reasonable likelihood of further instances of the sub-group engaging in unco-operative behaviour in a manner which causes there to be, or contributes to there being, significant tax issues in respect of the sub-group or members of the sub-group.
(2)Paragraphs 36 to 40 apply in relation to a UK sub-group as they apply in relation to a UK group.
(3)Paragraphs 41 to 45 apply in relation to the head of a UK sub-group of a foreign group that is a qualifying group at the material time as they apply in relation to the head of a UK group.
(4)In the application of paragraph 41 in the case of a UK sub-group, sub-paragraph (4) has effect in relation to a UK sub-group as if for paragraphs (b) and (c) there were substituted—
“(b)the identity of the sub-group is not to be regarded as altered by any change in its membership resulting from a relevant body—
(i)becoming a 51% subsidiary of a member of the sub-group, or
(ii)ceasing to be a 51% subsidiary of another member of the sub- group; and
(c)if the sub-group becomes a UK sub-group of another foreign group, it is to be treated as if it were still a UK sub-group of the original foreign group.”
(5)As applied by this paragraph, paragraphs 36 to 45 have effect as if references to a UK group (including in references to the head of a UK group or members of a UK group) were references to a UK sub-group.
(6)In paragraphs 40, 41, 46, 47 and 49, references to a group (including in references to the head of a group or members of a group) include a UK sub-group.
(7)In paragraph 46, references to the head of a UK group include the head of a UK sub-group.