Part 5Loan Relationships

Chapter 14European cross-border mergers

Exception for tax avoidance cases

437Tax avoidance etc

(1)

This Chapter does not apply in relation to the merger if—

(a)

the merger is not effected for genuine commercial reasons, or

(b)

the merger 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.

(2)

But subsection (1) does not prevent this Chapter from applying if before the merger—

(a)

any of the merging companies has applied to the Commissioners for Her Majesty's Revenue and Customs, and

(b)

the Commissioners have notified the merging companies that they are satisfied that subsection will not have that effect.

(3)

Sections 427 and 428 have effect in relation to subsection (2) as in relation to section 426(2), taking the references in section 428 to section 426(2)(b) as references to subsection (2)(b) of this section.