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CFM77600 | Other tax rules on corporate debt: group mismatch schemes: meaning of group

From HM Revenue & Customs · Corporate Finance Manual

The definition of a ‘group’ for the purposes of the GMS is similar to the meaning of ‘associated with’ set out in CTA09/S400C (CFM39170) and CTA10/S937K (CFM63440). A GMS group includes company A and any other company that is party to the scheme that is associated with company A.

For the purposes of the GMS, companies are associated if any of the following five conditions are met, at any time during an accounting period.

  1. The financial results of the two companies (company A and company B) meet the consolidation condition. The two companies will meet the consolidation condition if:

  • their results are required to be comprised in group accounts,

  • they would be required to be comprised in such accounts but for the application of an exemption, or

  • they are comprised in such accounts.

  1. ‘Group accounts’ in this context means either accounts prepared under S399 of the Companies Act 2006 or any corresponding provision of the law of a territory outside the UK.

  2. The two companies (company A and company B) are connected for the accounting period in which the relevant time falls (connection has the meaning given by CTA09/S466 to S471) (CFM35020).

  3. At the relevant time, either of the companies (A or B) have a major interest in the other (major interest has the meaning given by CTA09/S473 and S474) (CFM35920).

  4. The results of company A and a third company meet the consolidation condition for a period and that period includes the relevant time. At the relevant time the third company has a major interest in company B.

  5. There is a connection between company A and a third company for the accounting period of company A in which the relevant time falls and at the relevant time the third company has a major interest in company B.