Corporation Tax Act 2009 section 626

Transactions to which section 625 applies

Section 626 defines which transactions or series of transactions trigger the group continuity rules in section 625 when one group member replaces another as party to a derivative contract.

• A single related transaction qualifies if it takes place between two companies that are members of the same group and both are within the charge to corporation tax on that transaction.
• A series of transactions also qualifies if, taken together, the series has the same economic effect as a single related transaction between two group members.
• For a series of transactions to qualify, each company need only have been a member of the same group at some point during the series, rather than throughout.
• Both companies involved in a qualifying series must be ones that would fall within the charge to corporation tax had the equivalent single related transaction taken place.