This Brief outlines HMRC's view of what it means to be 'associated companies' for the purposes of the exception to the degrouping charge, following the Court of Appeal decision in Johnston Publishing.
The case of Johnston Publishing (North) Ltd versus HMRC concerned the degrouping charge which may arise when a company leaves a group of companies at a time when it owns an asset that had been acquired from a fellow group company (Section 179 Taxation of Chargeable Gains Act 1992).
HMRC believe that the Court of Appeal decision confirms its view of the exception to the degrouping charge for 'associated companies' in Section 179(2): the transferor and transferee company are required to be 'associated' at the time of the intra-group transfer as well as at the time they leave the group.
For full details on the decision and HMRC's view on what constitutes a group for the purposes of the degrouping charge see here