Section 1047 | Meaning of “group” and “51% subsidiary” in sections 1033 to 1047

(1)In this section and sections 1033 to 1046 “group” (except in the expression “trading group”) means a company which has one or more 51% subsidiaries but is not itself a 51% subsidiary of any other company, together with those subsidiaries.This is subject to subsection (2).

(2)If the whole or a significant part of the business carried on by an unquoted company (“the successor company”) was previously carried on by—

(a)the company making the purchase, or

(b)a company which is, apart from this subsection, a member of a group to which the company making the purchase belongs,

the successor company and any company of which it is a 51% subsidiary are treated as being members of the same group as the company making the purchase (whether or not, apart from this subsection, the company making the purchase is a member of a group).

(3)But subsection (2) does not apply if the successor company first carried on the business in question more than 3 years before the time of the purchase.

(4)For the purposes of this section and sections 1033 to 1046, a company which has ceased to be a 51% subsidiary of another company before the time of the purchase is treated as continuing to be a 51% subsidiary of that company if at the time of the purchase there exist arrangements under which it could again become such a subsidiary.