Corporation Tax Act 2010 section 935

Parent undertakings and consolidated group accounts

Section 935 creates a deemed requirement for parent undertakings to prepare consolidated group accounts for the purposes of the lease depreciation provisions, even where no such requirement exists under accounting rules.

• A body corporate that qualifies as a parent undertaking under the Companies Act 2006 is treated as if it were required to prepare consolidated group accounts in accordance with generally accepted accounting practice, even if no such obligation actually exists.
• This deemed requirement applies regardless of where the body corporate is incorporated, so overseas parent companies are also caught by this rule.
• The term "parent undertaking" takes its meaning from section 1162 of the Companies Act 2006, which sets out the circumstances in which one entity is the parent of another.
• The practical effect is that when identifying leases within the scope of this Part and calculating the rental income from them, the existence of consolidated group accounts is assumed for all parent undertakings.