The rules in this article apply only where the loss buying rules (¶Ù2.402–D2.404) do not apply. This is usally in cases where there is no arrangement for avoiding tax, eg on a merger or takeover.
Groups absorbed
Members of a group which is absorbed or taken over (Group S), are treated for the purpose of the capital loss restrictions as joining the enlarged group (Group A), at the time when the principal company of the group absorbed or taken over (Group S) became a member of the other group (Group A)1. The reason for these rules is that the tax legislation specifically states that a group remains the same group provided the same company remains the principal company of the group. In addition, if the principal company of a group becomes a member of another group, the first group and the group it joins are to be regarded as the same group2. Application of this legislation to the pre-entry loss restrictions would mean that, if the S Group were taken over 100% by
To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to Tolley+™ Research or register for a free trial
Web page updated on 17 Mar 2025 15:43