Finance (No. 2) Act 1992

50 Transfer of a non-UK trade

The following section shall be inserted after section 815 of the Taxes Act 1988—

“815A Transfer of a non-UK trade

(1) This section applies where section 269C of the 1970 Act or section 140C of the [1992 c. 12.] Taxation of Chargeable Gains Act 1992 applies; and references in this section to company A, the transfer and the trade shall be construed accordingly.

(2) Where company A produces to the inspector an appropriate certificate given by the tax authorities of the relevant member State, this Part, including any arrangements having effect by virtue of section 788, shall apply as if the amount stated in the certificate in accordance with subsection (4)(b) below were tax payable under the law of the relevant member State.

(3) In any case where—

(a) company A is unable to obtain an appropriate certificate from the tax authorities of the relevant member State,

(b) the Board is satisfied that this is the case, and

(c) company A makes a claim to the Board under this subsection and provides the Board with such information and documents in connection with the claim as the Board may require,

the Board shall determine the amount which in their opinion is the amount of tax computed on the required basis which would have been payable under the law of the relevant member State in respect of the gains accruing to company A on the transfer but for the Mergers Directive; and this Part, including any arrangements having effect by virtue of section 788, shall apply as if the amount so determined were tax payable under the law of the relevant member State.

(4) For the purposes of this section, an appropriate certificate is one containing—

(a) a statement to the effect that gains accruing to company A on the transfer would have been chargeable to tax under the law of the relevant member State but for the Mergers Directive;

(b) a statement of the amount of tax which would have been payable under that law in respect of the gains so accruing but for that Directive; and

(c) a statement to the effect that that amount has been computed on the required basis.

(5) For the purposes of this section, the required basis is that—

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

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

(6) In this section—

• “the Mergers Directive” means the [O.J. No. L225/1.] Directive of the Council of the European Communities dated 23rd July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different member States (no. 90/434/EEC);

• “relevant member State” means the member State in which, immediately before the time of the transfer, company A carried on the trade through a branch or agency.”