The degrouping charge does not apply in the case of certain mergers.

There are two sets of provisions concerning mergers, in TCGA 1992, s. 181 and s. 179(1B).

TCGA 1992, s. 181

This exemption applies where:

as part of a ‘merger’ (as defined) a company, A, ceases to be a member of a group of companies, the A group; and

that merger was carried out for bona fide commercial reasons and did not have tax avoidance as the main or one of its main purposes.

(TCGA 1992, s. 181(1))

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