Taxation of Chargeable Gains Act 1992

[F1 140H. Share exchanges U.K.

(1) This section applies if—

(a) a company (“company B”) issues shares or debentures to a person in exchange for shares in or debentures of another company (“company A”),

(b) the exchange falls within one of the cases specified in section 135(2), and

(c) either company B or company A or both is a transparent entity.

(2) Where this section applies—

(a) “company” in section 135 shall be treated as meaning an entity listed in [F2 Part A of Annex I] to the Mergers Directive, and

(b) section 135(3) does not apply.

(3) If, as a result of an exchange in relation to which this section applies, a gain accruing to a person holding shares in or debentures of company A on the exchange would, but for the Mergers Directive, have been chargeable to tax under the law of a member State other than the United Kingdom, [F3 Part 2 of TIOPA 2010] (double taxation relief), including any [F4 double taxation relief arrangements], shall apply as if that tax, calculated in accordance with subsection (4), had been chargeable.

(4) Tax is calculated in accordance with this subsection if—

(a) so far as permitted under the law of the relevant member State, losses arising on the exchange are set against gains arising on the exchange, and

(b) any relief available to company A under that law has been claimed.]

Textual Amendments

F1 Ss. 140H-140L and cross-heading inserted (with effect in accordance with reg. 3(3) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 3 para. 1 (with S.I. 2008/1579, reg. 4(2))

F2 Words in s. 140H(2)(a) substituted (1.7.2011) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2011 (S.I. 2011/1431), regs. 1(2), 2(2)

F3 Words in s. 140H(3) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 44(a) (with Sch. 9 paras. 1-9, 22)

F4 Words in s. 140H(3) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 44(b) (with Sch. 9 paras. 1-9, 22)