SCHEDULE 29Gains and losses of a company from intangible fixed assets
Part 11Transfer of business or trade
Company reconstruction involving transfer of business
84
(1)
This paragraph applies where—
(a)
a scheme of reconstruction involves the transfer of the whole or part of the business of one company (“the transferor”) to another company (“the transferee”), and
(b)
the transferor receives no part of the consideration for the transfer (otherwise than by the transferee taking over the whole or part of the liabilities of the business).
For this purpose “scheme of reconstruction” has the same meaning as in section 136 of the Taxation of Chargeable Gains Act 1992 (c. 12).
(2)
If the assets included in the transfer include intangible fixed assets that are chargeable intangible assets in relation to the transferor immediately before the transfer and in relation to the transferee immediately after the transfer, the transfer of those assets is treated for the purposes of this Schedule as tax-neutral (see paragraph 140).
(3)
If a transfer falls within sub-paragraph (1) and also within paragraph 55 (transfers within a group), that paragraph applies and this paragraph does not.
(4)
This paragraph does not apply if the transferor or the transferee is—
(a)
a qualifying society within the meaning of section 461A of the Taxes Act 1988 (incorporated friendly societies entitled to exemption from tax), or
(b)
a dual resident investing company within the meaning of section 404 of that Act (limitation of group relief).
(5)
This paragraph applies only if the reconstruction—
(a)
is effected for bona fide commercial reasons, and
(b)
does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to corporation tax, capital gains tax or income tax.
(6)
The requirements of sub-paragraph (5) are treated as met where, before the transfer, the Inland Revenue have, on the application of the transferee, notified that company that they are satisfied that the requirements of that sub-paragraph will be met.
For the procedure on such an application, see paragraph 88.