Finance Act 1972

Transfer of assets and liabilities between resident companies

4 (1) No transfer of assets (other than cash) or of liabilities between one company and another shall constitute, or be treated as giving rise to, a distribution by virtue of subsection (2)(b) or (3) of the said section 233 if they are companies—

(a) both of which are resident in the United Kingdom and neither of which is a 51 per cent. subsidiary of a company not so resident; and

(b) which neither at the time of the transfer nor as a result of it are under common control.

(2) For the purposes of this paragraph two companies are under common control if they are under the control of the same person or persons, and for this purpose " control" shall be construed in accordance with section 302 of the Taxes Act.

(3) Any amount which would be a distribution by virtue of subsection (3) of the said section 233 apart from the proviso to that subsection (groups of companies resident in the United Kingdom), shall not constitute a distribution by virtue of subsection (2)(b) of that section.