Taxes Consolidation Act 1997 Schedule 18A paragraph 5

Companies changing groups on certain transfers of shares etc.

Paragraph 5 provides that where a company changes group membership as a result of a no-gain/no-loss disposal of shares, its period of membership of the old group is treated as part of its membership of the new group.

• Applies where a company moves from one group to another because of a disposal of shares in that company (or any other company)
• The disposal must be one on which neither a gain nor a loss accrues under the Tax Acts or the Capital Gains Tax Acts (e.g. a reconstruction or amalgamation under sections 584–587)
• Losses that accrued before the change, and assets held at the time of the change, are treated as if the company's membership of the old group were part of its membership of the new group
• This prevents an inappropriate restriction on the allowability of losses that would otherwise arise solely because of the reconstruction or share transfer