26D Value shifting: transactions treated as a reorganisation of share capital.

1

Where—

a

but for sections 78 and 85(3) below, section 26 above would have effectas respects the disposal by a company (“the disposing company”) of anasset consisting of shares in or debentures of another company (“theoriginal holding”) in exchange for shares in or debentures of a furthercompany which, immediately after the disposal, is not a member of the samegroup as the disposing company, and

b

if section 26 above had effect as respects that disposal, any allowableloss or chargeable gain accruing on the disposal would be calculated as if theconsideration for the disposal were increased by an amount,

the disposing company shall be treated for the purposes of section 79(2)below as receiving, on the reorganisation of share capital that is treated asoccurring by virtue of section 85(3) below, that amount for the disposal ofthe original holding.

2

For the purposes of subsection (1) above it shall be assumed that section86 below has effect generally for the purposes of this Act, and in thatsubsection “group” has the same meaning as in sections 26 to26C above.