PART VI COMPANY DISTRIBUTIONS, TAX CREDITS ETC

CHAPTER III MATTERS WHICH ARE NOT DISTRIBUTIONS FOR THE PURPOSES OF THE CORPORATION TAX ACTS

Demergers

F1213AExempt distributions: division of business

(1)

A reference in the Corporation Tax Acts to distributions of a company shall not apply to a distribution if—

(a)

it is a distribution consisting of—

(i)

the transfer of part of a business by a company (“the distributing company”) to one or more other companies (“the transferee company or companies”), and

(ii)

the issue of shares by the transferee company or companies to the members of the distributing company, and

(b)

the requirements of either section 140A(1A) of the 1992 Act (division of UK business) or section 140C(1A) of that Act (division of non-UK business) are satisfied in relation to the distribution.

(2)

A distribution to which this section applies is an “exempt distribution” for the purposes of sections 214 to 217.

(3)

The expression “relevant company” in sections 214 to 217 includes the distributing company and the transferee company or companies.