Finance Act, 1999

Amendment of Chapter 5 (group relief) of Part 12 of Principal Act.

78.— (1) Chapter 5 of Part 12 of the Principal Act is hereby amended—

(a) in section 410—

(i) in subsection (1)(a) by the insertion before the definition of “trading or holding company” of the following definition:

“‘tax’, in relation to a Member State of the European Communities other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State;”,

(ii) by the substitution for paragraph (b) of subsection (1) of the following paragraph:

“(b) For the purposes of this section—

(i) a company shall be owned by a consortium if 75 per cent or more of the ordinary share capital of the company is beneficially owned between them by 5 or fewer companies resident in one or more than one Member State of the European Communities of which none of these companies beneficially owns less than 5 per cent of that capital, and those companies shall be called the members of the consortium, and

(ii) references to a company resident in a Member State of the European Communities shall be construed as references to a company which, by virtue of the law of a Member State of the European Communities, is resident for the purposes of tax in such a Member State.”,

(iii) in paragraph (a) of subsection (3) by the substitution for “in the State” of “in a Member State of the European Communities”, and

(iv) in paragraph (a)(i) of subsection (4) by the substitution for “so resident” of “resident in a Member State of the European Communities”,

(b) in section 411(1)—

(i) in paragraph (a) by the insertion before the definition of “trading company” of the following definition:

“‘tax’, in relation to a Member State of the European Communities other than the State, means any tax imposed in the Member State which corresponds to corporation tax in the State;”,

(ii) in paragraph (c)—

(I) by the substitution for “companies resident in the State” of “a company which, by virtue of the law of a Member State of the European Communities, is resident for the purposes of tax in such a Member State”, and

(II) by the substitution for “company not resident in the State” of “company, not being a company which, by virtue of the law of a Member State of the European Communities, is resident for the purposes of tax in such a Member State”,

and

(c) in section 420 by the insertion in subsection (1) after “trade” of “in respect of which the company is within the charge to corporation tax”.

(2) This section shall apply as respects accounting periods ending on or after the 1st day of July, 1998.