Corporation Tax Act 2009 section 768

Company cannot be member of more than one group

Section 768 establishes the rule that a company can only belong to one group for the purposes of the intangible fixed assets regime, and sets out a sequential series of tie-breaker tests to resolve situations where a company could otherwise fall into more than one group.

• A company cannot be a member of more than one group at the same time for intangible fixed assets purposes.
• Where overlapping group membership arises, four tie-breaker tests are applied in sequence until the company's single group membership is determined.
• The tests compare the principal companies of the competing groups by reference to profit entitlements, asset entitlements on winding up, and ordinary share capital ownership.
• Cross-holdings between principal companies of competing groups are stripped out when first applying the effective 51% subsidiary test.