Chargeable gains group (UK corporation tax)
A chargeable gains group generally comprises a principal company and its qualifying 75% subsidiaries, including subsidiaries in a chain of qualifying 75% relationships. A subsidiary must also be an effective 51% subsidiary of the principal company under the relevant economic entitlement tests. Membership enables specified gains-group rules, subject to conditions; its tests should be distinguished from those for surrendering group relief for losses.
Worked example
Parent P owns 80% of S, and S owns 80% of T. Assume ordinary share ownership and profit and asset entitlements follow those percentages, with all other conditions met. Each direct link is at least 75% and P’s effective interest in T is 64%, so all three are in the gains group.
Common mistake
Assuming an indirect company automatically qualifies just because every direct link is 75%, without testing effective 51% economic entitlement to the principal company.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Direct | June 2026–June 2027 |