CG45130 - Capital gains group definition: group continuity following takeover
TCGA92/S170 (10)
TCGA92/S170(10) makes it clear that a capital gains group remains the same group so long as the same company remains the principal company of the group. Otherwise it might be argued that acquiring (or losing) a subsidiary changes the identity of the group.
Perhaps more importantly, TCGA92/S170(10) also deals with the situation where the principal company of one group is taken over by another company. When the principal company of one group becomes a member of another group then the first group and the other group are 鈥渞egarded as the same鈥�. This is of particular importance in ensuring that degrouping charges are not triggered when an entire group is taken over. Even so, it is possible that for a member of the first group to fail the 51% effective ownership test by reference to the principal company of the enlarged group. The degrouping rules are modified to deal with this, see CG45410 (special rule 2).