Section 1039 | Requirements where purchasing company is a member of a group

(1)This section applies if the company making the purchase is immediately before the purchase a member of a group.

(2)In this section and sections 1040 to 1041 that group is referred to as “the purchaser's group”.

(3)If—

(a)immediately after the purchase the seller owns shares in one or more other members of the purchaser's group (whether or not the seller then owns shares in the company making the purchase), or

(b)immediately after the purchase the seller owns shares in the company making the purchase, and immediately before the purchase the seller owns shares in one or more other members of the group,

the seller's interest as a shareholder in the group must be substantially reduced (see section 1040(1)).

(4)If immediately before the purchase an associate of the seller owns shares in any member of the purchaser's group, the combined interests as shareholders in the group of the seller and the seller's associates must be substantially reduced (see section 1040(4)).

(5)This section is subject to section 1043 (relaxation of requirements in certain cases).