83(1)Paragraphs 84 and 85 apply where—
(a)arrangements are made in accordance with which a company (“the new company”) acquires all the shares (“old shares”) in another company (“the old company”);
(b)the acquisition provided for by the arrangements falls within sub-paragraph (2); and
(c)the Inland Revenue have, before any exchange of shares takes place under the arrangements, given an approval notification.
(2)An acquisition of shares falls within this sub-paragraph if—
(a)the consideration for the old shares consists wholly of the issue of shares (“new shares”) in the new company;
(b)new shares are issued in consideration of old shares only at times when there are no issued shares in the new company other than—
(i)subscriber shares, and
(ii)new shares previously issued in consideration of old shares;
(c)the consideration for new shares of each description consists wholly of old shares of the corresponding description; and
(d)new shares of each description are issued to the holders of old shares of the corresponding description in respect of, and in proportion to, their holdings.
(3)For the purposes of sub-paragraph (1)(c) an approval notification is one which, on an application by either the old company or the new company, is given to the applicant company and states that the Inland Revenue are satisfied that the exchange of shares under the arrangements—
(a)will be effected for commercial reasons, and
(b)will not form part of any such scheme or arrangements as are mentioned in section 137(1) of the 1992 Act (schemes with tax avoidance purpose).
(4)For the purposes of this paragraph old shares and new shares are of a corresponding description if, on the assumption that they were shares in the same company, they would be of the same class and carry the same rights.
(5)In this paragraph references to “shares”, except in the expression “subscriber shares”, include securities.
(6)References in paragraphs 84 to 87 to “shares”, “old shares”, “new shares”, “the old company” and “the new company” shall be construed in accordance with this paragraph.