Section 618 | Elections under section 617: groups of companies

(1)If—

(a)a company makes an election under section 617 in relation to its contracts, and

(b)another company, which is a member of the same group as the company making the election, is a party to a contract to which the election applies,

the other company is treated, in relation to that contract, as if it had also made such an election.

(2)If—

(a)a company (“the electing company”) makes an election under section 617 in relation to its contracts,

(b)another company (“the transferee”) becomes a party to a contract to which section 584 (hybrid derivatives with embedded derivatives) or section 586 (other contracts with embedded derivatives) applies, in place of the electing company (whether before or after the election is made), and

(c)the transferee is a member of the same group of companies as the electing company at the time of the transfer,

the transferee is treated, in relation to the contract mentioned in paragraph (b), as if it had also made such an election.

(3)If—

(a)a company (“A”) is treated under section 584 or 586 as a party to a relevant contract in relation to which section 616(1) applies,

(b)another company (“B”) becomes a party to that contract in place of A,

(c)A and B are members of the same group of companies when B becomes a party to the contract, and

(d)section 616(1) does not apply in relation to B's other relevant contracts because of an election under section 617 (whenever made),

subsection (4) applies, unless A, subsequent to B's becoming a party to the contract, makes such an election.

(4)B is treated, in relation to the contract mentioned in subsection (3)(b), as if section 616(1) applied in relation to it.

(5)In this section, references to a company being a member of the same group of companies are to be read in accordance with section 170 of TCGA 1992 (interpretation of sections 171 to 181 of that Act: groups).