Corporation Tax Act 2009 section 344

Introduction

Section 344 introduces provisions that apply when a company leaves a corporate group within six years of receiving a loan relationship asset or liability through an intra-group transfer.

• The "degrouping" rules in sections 345 and 346 are triggered when a transferee company leaves its group within six years of receiving a loan relationship via a group transaction, provided the transferor was not using fair value accounting
• The six-year period runs from the date of the transfer (or, where there was a series of transactions, from the date of the last transaction in the series)
• If the transferee leaves the group as a consequence of a European cross-border transfer of business or merger, it is not treated as having left the group for these purposes
• Where a European cross-border transfer or merger causes the transferee to join a new group, the original group and the new group are treated as if they were the same group