Corporation Tax Act 2010 section 154

Arrangements for transfer of member of group of companies etc.

Section 154 is an anti-avoidance rule that prevents group relief being claimed where arrangements are in place that could result in a company being temporarily moved into or out of a group to exploit surrenderable losses or other amounts.

• Two companies that would otherwise be in the same group are treated as not being group members if one has surrenderable amounts and certain arrangements exist
• Arrangements are caught if they could result in the first company leaving one group and joining another (Effect 1)
• Arrangements are also caught if an outside person could obtain control of the first company but not of the second company (Effect 2)
• Arrangements are further caught if a third company outside the group could take over the whole or part of a trade carried on by the first company, whether directly or through an intermediate successor (Effect 3)