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Companies Act 2006

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Changes over time for: Section 611

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Point in time view as at 06/04/2022.

Changes to legislation:

Companies Act 2006, Section 611 is up to date with all changes known to be in force on or before 09 March 2025. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations. Help about Changes to Legislation

611Group reconstruction reliefU.K.
This section has no associated Explanatory Notes

(1)This section applies where the issuing company—

(a)is a wholly-owned subsidiary of another company (“the holding company”), and

(b)allots shares—

(i)to the holding company, or

(ii)to another wholly-owned subsidiary of the holding company,

in consideration for the transfer to the issuing company of non-cash assets of a company (“the transferor company”) that is a member of the group of companies that comprises the holding company and all its wholly-owned subsidiaries.

(2)Where the shares in the issuing company allotted in consideration for the transfer are issued at a premium, the issuing company is not required by section 610 to transfer any amount in excess of the minimum premium value to the share premium account.

(3)The minimum premium value means the amount (if any) by which the base value of the consideration for the shares allotted exceeds the aggregate nominal value of the shares.

(4)The base value of the consideration for the shares allotted is the amount by which the base value of the assets transferred exceeds the base value of any liabilities of the transferor company assumed by the issuing company as part of the consideration for the assets transferred.

(5)For the purposes of this section—

(a)the base value of assets transferred is taken as—

(i)the cost of those assets to the transferor company, or

(ii)if less, the amount at which those assets are stated in the transferor company's accounting records immediately before the transfer;

(b)the base value of the liabilities assumed is taken as the amount at which they are stated in the transferor company's accounting records immediately before the transfer.

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