Formation of SE by merger

140EMerger leaving assets within UK tax charge

1

This section applies where—

a

an SE is formed by the merger of two or more companies in accordance with Articles 2(1) and 17(2)(a) or (b) of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea),

b

each merging company is resident in a member State,

c

the merging companies are not all resident in the same State, and

d

section 139 does not apply to any qualifying transferred assets.

2

Where this section applies, qualifying transferred assets shall be treated for the purposes of corporation tax on chargeable gains as if acquired by the SE for a consideration resulting in neither gain nor loss for the transferor.

3

For the purposes of subsections (1) and (2) an asset is a qualifying transferred asset if—

a

it is transferred to the SE as part of the process of the merger forming it, and

b

subsections (4) and (5) are satisfied in respect of it.

4

This subsection is satisfied in respect of a transferred asset if—

a

the transferor is resident in the United Kingdom at the time of the transfer, or

b

any gain that would have accrued to the transferor, had it disposed of the asset immediately before the time of the transfer, would have been a chargeable gain forming part of the transferor's chargeable profits in accordance with section 10B.

5

This subsection is satisfied in respect of a transferred asset if—

a

the transferee SE is resident in the United Kingdom on formation, or

b

any gain that would accrue to the transferee SE were it to dispose of the asset immediately after the transfer would be a chargeable gain forming part of the SE's chargeable profits in accordance with section 10B.

6

For the purposes of this section a company is resident in a member State if—

a

it is within a charge to tax under the law of the State as being resident for that purpose, and

b

it is not regarded, for the purposes of any double taxation relief arrangements to which the State is a party, as resident in a territory not within a member State.

7

This section does not apply to the formation of an SE by merger if—

a

it is not effected for bona fide commercial reasons, or

b

it forms part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoiding liability to corporation tax, capital gains tax or income tax;

and section 138 (clearance in advance) shall apply to this subsection as it applies to section 137 (with any necessary modifications).

140FMerger not leaving assets within UK tax charge

1

This section applies where—

a

an SE is formed by the merger of two or more companies in accordance with Articles 2(1) and 17(2)(a) or (b) of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea),

b

each merging company is resident in a member State,

c

the merging companies are not all resident in the same State,

d

in the course of the merger a company resident in the United Kingdom (“company A”) transfers to a company resident in another member State (“company B”) all assets and liabilities relating to a business which company A carried on in a member State other than the United Kingdom through a permanent establishment, and

e

the aggregate of the chargeable gains accruing to company A on the transfer exceeds the aggregate of any allowable losses so accruing.

2

Where this section applies, for the purposes of this Act—

a

the allowable losses accruing to company A on the transfer shall be set off against the chargeable gains so accruing, and

b

the transfer shall be treated as giving rise to a single chargeable gain equal to the aggregate of those gains after deducting the aggregate of those losses.

3

Where this section applies, section 815A of the Taxes Act shall also apply.

4

Subsections (6) and (7) of section 140E apply for the purposes of this section as they apply for the purposes of that section.

140GTreatment of securities issued on merger

1

This section applies where—

a

an SE is formed by the merger of two or more companies in accordance with Articles 2(1) and 17(2)(a) or (b) of Council Regulation (EC) 2157/2001 on the Statute for a European Company (Societas Europaea),

b

each merging company is resident in a member State,

c

the merging companies are not all resident in the same State, and

d

the merger does not constitute or form part of a scheme of reconstruction within the meaning of section 136.

2

Where this section applies, the merger shall be treated for the purposes of section 136 as if it were a scheme of reconstruction.

3

Where section 136 applies by virtue of subsection (2) above section 136(6) (and section 137) shall not apply.

4

Subsections (6) and (7) of section 140E apply for the purposes of this section as they apply for the purposes of that section.