Taxation (International and Other Provisions) Act 2010 section 338

Meaning of "group"

Section 338 defines what constitutes a "group" for the purposes of the transfer pricing rules in Part 4 of the Act.

• A group consists of a parent company and all its subsidiary undertakings, as defined by accounting standards.
• The definition relies on the concept of "subsidiary undertakings" from the Companies Act 2006 (section 1162 and Schedule 7), which looks at control, dominant influence, or unified management.
• Two companies are members of the same group if one is a subsidiary undertaking of the other, or both are subsidiary undertakings of a common parent — this is the key test for determining whether transfer pricing provisions apply between related entities.
• This definition was updated by Finance (No. 2) Act 2017 to align group membership with accounting-based definitions of control, ensuring consistency with modern consolidation principles.

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