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Taxation of Chargeable Gains Act 1992

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Changes over time for: Section 140C

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Version Superseded: 08/07/2008

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Point in time view as at 29/11/2007. This version of this provision has been superseded. Help about Status

Changes to legislation:

Taxation of Chargeable Gains Act 1992, Section 140C is up to date with all changes known to be in force on or before 04 March 2025. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

[F1140C[F2Transfer or division of non-UK business]U.K.

(1)This section applies where—

(a)a [F3company] resident in the United Kingdom ([F4the transferor]) transfers to a [F3company] resident in another member State ([F5the transferee]) the whole or part of a [F6business] which, immediately before the time of the transfer, [F4the transferor] carried on in a member State other than the United Kingdom through a [F7permanent establishment],

(b)the transfer includes the whole of the assets of [F4the transferor] used for the purposes of the [F6business] or part (or the whole of those assets other than cash),

(c)the transfer is wholly or partly in exchange for [F8shares or debentures] issued by [F5the transferee] to [F4the transferor],

(d)the aggregate of the chargeable gains accruing to [F4the transferor] on the transfer exceeds the aggregate of the allowable losses so accruing,

(e)a claim is made under this section by [F4the transferor], and

(f)section 140D does not prevent this section applying.

[F9(1A)This section also applies where a company resident in the United Kingdom transfers part of its business to one or more companies if—

(a)the part of the transferor’s business which is to be transferred is carried on, immediately before the time of the transfer, by the transferor in a member State other than the United Kingdom through a permanent establishment,

(b)at least one transferee is resident in a member State other than the United Kingdom,

(c)the transferor company continues to carry on a business after the transfer,

(d)the conditions in subsection (1)(b), (d), (e) and (f) are satisfied, and

(e)either of the following conditions is satisfied.

(1B)Condition 1 is that the transfer is made in exchange for the issue of shares in or debentures of each transferee company to the persons holding shares in or debentures of the transferor.

(1C)Condition 2 is that the transfer is not made in exchange for the issue of shares in or debentures of each transferee by reason only, and to the extent only, that a transferee is prevented from complying with Condition 1 by section 658 of the Companies Act 2006 (rule against limited company acquiring own shares) or by a corresponding provision of the law of another member State preventing the issue of shares or debentures to itself.]

(2)In a case where this section applies, this Act shall have effect in accordance with subsection (3) below.

(3)The allowable losses accruing to [F10the transferor] on the transfer shall be set off against the chargeable gains so accruing and the transfer shall be treated as giving rise to a single chargeable gain equal to the aggregate of those gains after deducting the aggregate of those losses.

(4)No claim may be made under this section as regards a transfer in relation to which a claim is made under section 140.

(5)In a case where this section applies, section 815A of the Taxes Act shall also apply.

F11(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F12(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)Section 442(3) of the Taxes Act (overseas business of UK insurance companies) shall be ignored in arriving at the chargeable gains accruing to [F13the transferor] on the transfer, and the allowable losses so accruing, for the purposes of subsections (1)(d) and (3) above.

F14(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ]

Textual Amendments

F1S. 140C inserted (retrosp.) by 1992 c. 48, s. 45

F2S. 140C heading substituted (with effect in accordance with reg. 3(1) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(6) (with S.I. 2008/1579, reg. 4(1))

F3Word in s. 140C(1) substituted (with effect in accordance with reg. 3(1) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(2)(c) (with S.I. 2008/1579, reg. 4(1))

F4Words in s. 140C(1) substituted (with effect in accordance with reg. 3(1) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(2)(a) (with S.I. 2008/1579, reg. 4(1))

F5Words in s. 140C(1) substituted (with effect in accordance with reg. 3(1) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(2)(b) (with S.I. 2008/1579, reg. 4(1))

F6Word in s. 140C(1) substituted (with effect in accordance with reg. 3(1) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(2)(d) (with S.I. 2008/1579, reg. 4(1))

F7Words in s. 140C(1)(a) substituted (with effect in accordance with s. 153(4) of the amending Act) by Finance Act 2003 (c. 14), s. 153(1)(b)

F8Words in s. 140C(1)(c) substituted (with effect in accordance with s. 59(7) of the amending Act) by Finance (No. 2) Act 2005 (c. 22), s. 59(4)(a)

F9S. 140C(1A)-(1C) inserted (with effect in accordance with reg. 3(1) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(3) (with S.I. 2008/1579, reg. 4(1))

F10Words in s. 140C(3) substituted (with effect in accordance with reg. 3(1) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(4) (with S.I. 2008/1579, reg. 4(1))

F11S. 140C(6) omitted (with effect in accordance with reg. 3(1) of the amending S.I.) by virtue of The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(5) (with S.I. 2008/1579, reg. 4(1))

F12S. 140C(7) omitted (with effect in accordance with reg. 3(1) of the amending S.I.) by virtue of The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(5) (with S.I. 2008/1579, reg. 4(1))

F13Words in s. 140C(8) substituted (with effect in accordance with reg. 3(1) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(4) (with S.I. 2008/1579, reg. 4(1))

F14S. 140C(9) omitted (with effect in accordance with reg. 3(1) of the amending S.I.) by virtue of The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 1 para. 4(5) (with S.I. 2008/1579, reg. 4(1))

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