M1(1)Subject to the provisions of this section [F1and section 765A], all transactions of the following classes shall be unlawful unless carried out with the consent of the Treasury, that is to say—
(a)for a body corporate resident in the United Kingdom to cease to be so resident; or
(b)for the trade or business or any part of the trade or business of a body corporate so resident to be transferred from that body corporate to a person not so resident; or
F2(c)for a body corporate [F3resident in the United Kingdom] to cause or permit a body corporate not so resident over which it has control to create or issue any shares or debentures; or
(d)except for the purpose of enabling a person to be qualified to act as a director, for a body corporate so resident to transfer to any person, or cause or permit to be transferred to any person, any shares or debentures of a body corporate not so resident over which it has control, being shares or debentures which it owns or in which it has an interest.
(2)Nothing in subsection (1)(c) above shall apply to the giving to the bankers of the body corporate not resident in the United Kingdom of any security for the payment of any sum due or to become due from it to them by reason of any transaction entered into with it by them in the ordinary course of their business as bankers.
(3)Nothing in subsection (1)(c) above shall apply to the giving by the body corporate not resident in the United Kingdom to an insurance company of any security for the payment of any sum due or to become due from that body corporate to that company by reason of any transaction entered into with that body corporate by that company in the ordinary course of that company’s business by way of investment of its funds.
(4)Any consent granted by the Treasury under this section—
(a)may be given either specially (that is to say, so as to apply only to specified transactions of or relating to a specified body corporate) or generally (that is to say, so as not only so to apply); and
(b)may, if given generally, be revoked by the Treasury; and
(c)may in any case be absolute or conditional; and
(d)shall be published in such a way as to give any person entitled to the benefit of it an adequate opportunity of getting to know of it, unless in the opinion of the Treasury publication is not necessary for that purpose.
Textual Amendments
F11990 s.68(1), (4)in relation to transactions carried out on or after 1July 1990.
F2 Repealed by 1988(F) ss.105(6), 148and Sch.14 Part IVfrom 15March 1988.And see 1988(F) ss.61, 130-132and Sch.7for new requirements for companies from 15March 1988.
F31988(F) s.105(6)from 15March 1988.Previously
“so resident”.
Modifications etc. (not altering text)
C1 Provisions of this section employed in 1988(F) ss.105, 130and Sch.7.
Marginal Citations
M1Source—1970 s.482(1)-(4)
(1)Section 765(1) shall not apply to a transaction which is a movement of capital to which Article 1 of the M2 Directive of the Council of the European Communities dated 24th June 1988 No. 88/361/EEC applies.
(2)Where if that Article did not apply to it a transaction would be unlawful under section 765(1), the body corporate in question (that is to say, the body corporate resident in the United Kingdom) shall—
(a)give to the Board within six months of the carrying out of the transaction such information relating to the transaction, or to persons connected with the transaction, as regulations made by the Board may require, and
(b)where notice is given to the body corporate by the Board, give to the Board within such period as is prescribed by regulations made by the Board (or such longer period as the Board may in the case allow) such further particulars relating to the transaction, to related transactions, or to persons connected with the transaction or related transactions, as the Board may require.]
Textual Amendments
F4S. 765A inserted (with effect in accordance with s. 68(4) of the amending Act) by Finance Act 1990 (c. 29), s. 68(2)
Marginal Citations
M2O.J. No. L178/5
(1)M3Any person who, whether within or outside the United Kingdom, does or is a party to the doing of any act which to his knowledge amounts to or results in, or forms part of a series of acts which together amount to or result in, or will amount to or result in, something which is unlawful under section 765(1) shall be guilty of an offence under this section.
(2)In any proceedings in respect of such an offence against a director of the body corporate in question (that is to say, the body corporate which is or was resident in the United Kingdom) or against any person who was purporting to act in that capacity—
(a)it shall be presumed that he was a party to every act of that body corporate unless he proves that it was done without his consent or connivance; and
(b)it shall, unless the contrary is proved, be presumed that any act which in fact amounted to or resulted in, or formed part of a series of acts which together amounted to or resulted in or would amount to or result in, something which is unlawful under section 765(1) was to his knowledge such an act.
(3)M4Any person who is guilty of an offence under this section shall be liable on conviction on indictment—
(a)to imprisonment for not more than two years or to a fine, or to both; or
(b)where the person in question is a body corporate which is or was resident in the United Kingdom, to a fine not exceeding an amount equal to three times the corporation tax, capital gains tax and income tax paid or payable which is attributable to the income, profits or gains (including chargeable gains) arising in the 36 months immediately preceding the commission of the offence, or £10,000, whichever is the greater;
and proceedings in respect of such an offence alleged to have been committed by a person may be taken before the appropriate court in the United Kingdom having jurisdiction in the place where that person is for the time being.
(4)M5No proceedings for an offence under this section shall be instituted, in England or Wales, except by or with the consent of the Attorney General, or in Northern Ireland, except by or with the consent of the Attorney General for Northern Ireland.
(1)M6A body corporate shall be deemed for the purposes of sections 765and 766to be resident or not to be resident in the United Kingdom according as the central management and control of its trade or business is or is not exercised in the United Kingdom.
(2)If it is shown that it has been established as between the Crown and a body corporate for any income tax or corporation tax purpose that the body corporate was resident or ordinarily resident in the United Kingdom for any year of assessment or other period, it shall be presumed, except so far as the contrary is proved, that that body corporate was resident in the United Kingdom for the purposes of sections 765and 766at the beginning of that year of assessment or other period and that it continued to be so resident at all times thereafter.
(3)M7Where the functions of a body corporate consist wholly or mainly in the holding of investments or other property, the holding of the investments or property shall be deemed for the purposes of this section and sections 765and 766to be a business carried on by the body corporate.
(4)Notwithstanding anything in the preceding provisions of this section or in sections 765and 766,in no event shall a mere transfer of assets by a body corporate not resulting in a substantial change in the character or extent of the trade or business of that body corporate be treated for the purposes of sections 765and 766as a transfer of part of its trade or businessF5.
(5)In this section and in sections 765 and 766—
“”, “debenture” and “director” have, in relation to any body corporate, the meanings respectively assigned to them by Part XXVI of the M8Companies Act 1985 in relation to a company;
“control” (except in the expression “central management and control”) has, in relation to a body corporate, the meaning given by section 840;
“transfer”, in relation to shares or debentures, includes a transfer of any beneficial interest therein;
“insurance company” means a body corporate lawfully carrying on business as an insurer, whether in the United Kingdom or elsewhere; and
“funds” in relation to an insurance company means the funds held by it in connection with that business;
and a body corporate shall not be deemed for the purposes of this section and sections 765and 766to cease to be resident in the United Kingdom by reason only that it ceases to existF6.
(6)M9This section and sections 765 and 766 shall come into force on 6th April 1988 to the exclusion of section 482 of the 1970 Act (which is re-enacted by those sections); but any offence committed before 6th April 1988 shall not be punishable under section 766 and neither this subsection nor any other provision of this Act shall prevent any such offence from being punishable as if this Act had not been passed.