Section 400A | Carry forward of excess debt cap: new holding company

(1)This section applies if—

(a)a company (“C”) ceases to be the ultimate parent of a worldwide group (“the old group”) because of a qualifying takeover, and

(b)another company (“N”) becomes the ultimate parent of a worldwide group (“the new group”) as a result of the takeover.

(2)For this purpose there is a qualifying takeover if there is a change in the ownership of C which is disregarded for the purposes of Chapters 2 to 6 of Part 14 of CTA 2010 as a result of section 724A of that Act where—

(a)C is the other company referred to as C in that section, and

(b)N is the new company referred to as N in that section.

(3)In determining in accordance with section 400 the new group’s fixed ratio debt cap or group ratio debt cap for its first period of account, its excess debt cap generated in the immediately preceding period of account is taken to be that of the old group for the period of account of the old group ending on the day before the takeover day (see section 395A(3)).