7(1)This paragraph applies where a distribution is proposed to be declared—U.K.
(a)during an accounting reference period of the transferee company which includes a transfer date; or
(b)before any accounts are laid or filed in respect of such a period.
(2)Sections 270 to 276 of the Companies Act 1985 (c. 6) (accounts relevant for determining whether a distribution may be made by a company) shall have effect as if—
(a)references in section 270 to the company’s accounts and to accounts relevant under that section, and
(b)references in section 273 to initial accounts,
included references to such accounts as, on the assumptions stated in sub-paragraph (3), would have been prepared under section 226 of that Act in respect of the relevant year (“the relevant accounts”).
(3)Those assumptions are—
(a)that the relevant year was a financial year of the transferee company;
(b)that the vesting of property, rights and liabilities in accordance with the relevant scheme was effected immediately after the beginning of that year;
(c)that so much of the relevant scheme as contains provision by or under which there is a determination of the value of an asset to which the company becomes entitled in accordance with the scheme has effect for determining the value of that asset for the purposes of the accounts in question;
(d)that so much of the relevant scheme as contains provision by or under which there is a determination of the amount of a liability to which the company becomes subject in accordance with the scheme has effect for determining the amount of that liability for the purposes of the accounts in question;
(e)that securities of the transferee company issued or allotted before the declaration of the distribution had been issued or allotted before the end of the relevant year; and
(f)such other assumptions as may appear to the directors of the transferee company to be necessary or expedient for the purposes of this paragraph.
(4)The relevant accounts shall not be regarded as statutory accounts for the purposes of paragraph 8 of Schedule 7.
(5)In this paragraph—
“accounting reference period” has the meaning given by section 224 of the Companies Act 1985;
“complete financial year” means a financial year ending with 31st March;
“distribution” has the same meaning as in Part 8 of the Companies Act 1985;
“the relevant year”, in relation to a transfer date, means the last complete financial year ending before that date;
“a transfer date”, in relation to the transferee company, means the date of the coming into force of the relevant scheme.
Commencement Information
I1Sch. 6 para. 7 in force at 5.10.2004 by S.I. 2004/2575, art. 2(1), Sch. 1