HC Deb 13 July 1988 vol 137 cc498-9

12.—(1) A company may not make an election under section 94(4A) of this Act at a time when it is a member but not the principal company of a group unless the company did not become a member of the group until after the relevant time.

(2) Subject to sub-paragraph (3) below, an election under section 94(4A) of this Act by a company which is the principal company of a group shall have effect also as an election by any other company which at the relevant time is a member of the group.

(3) Sub-paragraph (2) above, shall not apply in relation to a company which, in some period after 5th April 1988 and before the relevant time, is not a member of the group if—

  1. (a) during that period the company makes a disposal to which section 94 of this Act applies, and
  2. (b) the period during which an election under subsection (4A) of that section could be made expires without such an election having been made.

(4) Sub-paragraph (2) above shall apply in relation to a company notwithstanding that the company ceases to be a member of the group at any time after the relevant time except where—

  1. (a) the company is an outgoing company in relation to the group, and
  2. (b) the election relating to the group is made after the company ceases to be a member of the group.

(5) In relation to a company which is the principal company of a group the reference in subsection (4B) of section 94 of this Act to the first relevant disposal is a reference to the first disposal to which that section applies by a company which is—

  1. (a) a member of the group but not an outgoing company in relation to the group, or
  2. (b) an incoming company in relation to the group.

13.—(1) In paragraph 12 above "the relevant time", in relation to a group of companies, is—

  1. (a) the first time when arty company which is then a member of the group, and is not an outgoing company in relation to the group, makes a disposal to which section 94 of this Act applies.
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  2. (b) the time immediately following the first occasion when a company which is an incoming company in relation to the group becomes a member of the group.
  3. (c) the time when an election is made by the principal company, whichever is earliest.

(2) In paragraph 12 above and this paragraph— incoming company", in relation to a group of companies, means a company which—

  1. (a) makes its first disposal to which section 94 of this Act applies at a time when it is not a member of the group, and
  2. (b) becomes a member of the group before the end of the period during which an election under subsection (4A) of that section could be made in relation to it and at a time when no such election has been made, and "outgoing company", in relation to a group of companies, means a company which ceases to be a member of the group before the end of the period during which an election under section 94(4A) of this Act could be made in relation to it and at a time when no such election has been made.

(3) Section 272 of the Taxes Act 1970 shall have effect for the purposes of paragraph 12 above and this paragraph as for those of sections 272 to 281 of that Act.'.—[Mr. Norman Lamont.]

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