Part VICompanies, oil, insurance etc.
Chapter ICompanies
Transactions within groups
172Transfer of United Kingdom branch or agency
1
Subject to subsections (3) and (4) below, subsection (2) below applies for the purposes of corporation tax on chargeable gains where—
a
there is a scheme for the transfer by a company (“company A”)—
i
which is not resident in the United Kingdom, but
ii
which carries on a trade in the United Kingdom through a branch or agency,
of the whole or part of the trade to a company resident in the United Kingdom (“company B”),
b
company A disposes of an asset to company B in accordance with the scheme at a time when the 2 companies are members of the same group, and
c
a claim in relation to the asset is made by the 2 companies within 2 years after the end of the accounting period of company B during which the disposal is made.
2
Where this subsection applies—
a
company A and company B shall be treated as if the asset were acquired by company B for a consideration of such amount as would secure that neither a gain nor a loss would accrue to company A on the disposal, and
b
section 25(3) shall not apply to the asset by reason of the transfer.
3
Subsection (2) above does not apply where—
a
company B, though resident in the United Kingdom,—
i
is regarded for the purposes of any double taxation relief arrangements as resident in a territory outside the United Kingdom, and
ii
by virtue of the arrangements would not be liable in the United Kingdom to tax on a gain arising on a disposal of the asset occurring immediately after its acquisition, or
b
company B is either a dual resident investing company or an investment trust.
4
Subsection (2) above shall not apply unless any gain accruing to company A—
a
on the disposal of the asset in accordance with the scheme, or
b
where that disposal occurs after the transfer has taken place, on a disposal of the asset immediately before the transfer,
would be a chargeable gain and would, by virtue of section 10(3), form part of its profits for corporation tax purposes.
5
In this section “company” and “group” have the meanings which would be given by section 170 if subsections (2)(a) and (9) of that section were omitted.