SCHEDULES
SCHEDULE 6Structure etc. of transferee companies
Distributable reserves of transferee companies
I16
1
This paragraph applies where statutory accounts of the transferee company prepared as at a particular time would show the company as having net assets in excess of the aggregate of—
a
its called-up share capital; and
b
the amount, apart from the property, rights and liabilities to which the company has become entitled or subject in accordance with the relevant scheme, of its undistributable reserves.
2
For the purposes of—
a
F1section 830 of the Companies Act 2006 (profits available for distribution), and
b
the preparation of statutory accounts of the company,
that excess shall be treated, except so far as the Secretary of State may otherwise direct, as representing an excess of the company’s accumulated realised profits over its accumulated realised losses.
3
For the purposes of F2section 831 of the Companies Act 2006 (restriction on distribution of assets), so much of the excess as is the subject of a direction under sub-paragraph (2), shall be treated as comprised in the company’s undistributable reserves (subject to any modification of the direction by a subsequent direction under sub-paragraph (4)).
4
The Secretary of State may give a direction for treatment as profits in relation to an amount equal to the whole or a part of an amount falling to be treated as mentioned in sub-paragraph (3).
5
A direction for treatment as profits is one that provides that, on the realisation (whether before or after the company in question ceases to be publicly owned) of such profits and losses as may be specified or described in the direction, so much of the amount in relation to which the direction is given as may be determined in accordance with it—
a
is to cease to be treated as mentioned in sub-paragraph (3); and
b
is to be treated as comprised in the company’s accumulated realised profits.
6
The Secretary of State must not give a direction under any provision of this paragraph at any time after the transferee company has ceased to be publicly owned.
7
The consent of the Treasury is required for the giving of a direction under this paragraph.
8
In this paragraph—
“accounting reference period” has the meaning given by F3section 391 of the Companies Act 2006;
“called-up share capital” has the meaning given by F6section 547 of that Act;
“net assets” has the meaning given by F4section 831(2) of F7that Act;
“statutory accounts”, in relation to a company, means accounts of the company prepared in respect of a period in accordance with the requirements of that Act, or with those requirements applied with such modifications as are necessary where that period is not an accounting reference period;
“undistributable reserves” has the meaning given by F5section 831(4) of that Act.