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Home / Simons-Taxes / Corporate tax / Part D2 Groups of companies / Division D2.2 Group relief for current year and carried forward losses / Group relief—anti-avoidance / D2.250 Group relief—limited rights, variable rights and options attaching to ordinary shares
Commentary

D2.250 Group relief—limited rights, variable rights and options attaching to ordinary shares


Corporate tax

Despite the detailed rules surrounding group relief, it would still be possible to create an artificial group in one or more of the following ways:

  1. Ìý

    •ÌýÌýÌýÌý by creating shares whose rights to participate in distributions or assets are severely limited so that the owner of them has little interest in the company issuing them

  2. Ìý

    •ÌýÌýÌýÌý by creating shares whose rights may at some future time be reduced (eg when the company's profits reach a certain level)

  3. Ìý

    •ÌýÌýÌýÌý by granting a put or call option in respect of the shares so that at some future time the holder's rights may be diminished

Special provisions have therefore been introduced to deal with each of these situations (and with a combination of two or more of them1).

Limited rights—group relief anti-avoidance provisions

A

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Web page updated on 24 Aug 2024 14:15