C10C2C11C9C5C7C1C6C3C4C8Part 5Loan Relationships

Annotations:
Modifications etc. (not altering text)
C10

Pt. 5 applied (with effect in accordance with Sch. 24 paras. 13-16 of the amending Act) by Finance Act 2009 (c. 10), Sch. 24 para. 15(2)(3)

C2

Pt. 5 applied (with modifications) (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 990(5), 1184(1) (with Sch. 2)

C11

Pt. 5 modified (15.11.2011 for specified purposes, 30.3.2012 for E.W.) by Localism Act 2011 (c. 20), ss., 240(5)(o), Sch. 24 para. 5; S.I. 2012/628, art. 3(b)

C5

Pt. 5 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)

C1

Pt. 5 modified (with effect in accordance with reg. 1(2)(3) of the amending S.I.) by The Taxation of Regulatory Capital Securities Regulations 2013 (S.I. 2013/3209), regs. 1(1), 11(3)-(6)

C6

Pt. 5 modified by 2010 c. 4, s. 356NC(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)

C3

Pt. 5 modified by 2010 c. 4, s. 356NB(1)-(4) (as inserted (1.4.2014) by Finance Act 2014 (c. 26), Sch. 16 paras. 4, 6)

C4

Pt. 5 modified by 2007 c. 3, s. 809FZZ(9) (as inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2))

C8

Pt. 5 modified by 2010 c. 4, s. 676AG(1) (as inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 75)

Chapter 14European cross-border mergers

Introduction

431Introduction to Chapter

1

This Chapter applies if the following conditions are met—

a

conditions A to D,

b

in the case of a merger within subsection (3)(a), (b) or (c), condition E, and

c

in the case of a merger within subsection (3)(c) or (d), condition F,

but see section 437 (tax avoidance etc) and section 438 (disapplication of Chapter where transparent entities involved).

2

Sections 435 and 436 (reorganisations involving loan relationships) also apply in cases that would be within subsection (1) apart from condition D not being met if, in addition to the conditions in section 435(1)(a) and (b), condition G is met in relation to a transfer in the course of the merger in which the reorganisation in question occurs.

3

Condition A is that—

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) No. 2157/2001 on the Statute for a European company (Societas Europaea),

b

an SCE is formed by the merger of two or more co-operative societies, at least one of which is a society registered under the F2the Co-operative and Community Benefit Societies Act 2014, in accordance with Articles 2(1) and 19 of Council Regulation (EC) No. 1435/2003 on the Statute for a European Co-operative Society (SCE),

c

a merger is effected by the transfer by one or more companies of all their assets and liabilities to a single existing company, or

d

a merger is effected by the transfer by two or more companies of all their assets and liabilities to a single new company (other than an SE or an SCE) in exchange for the issue by the transferee, to each person holding shares in or debentures of a transferor, of shares or debentures.

4

Condition B is that each merging company is resident in a F1relevant state.

5

Condition C is that the merging companies are not all resident in the same F4relevant state.

6

Condition D is that immediately after the merger the transferee is within the charge to corporation tax.

7

Condition E is that—

a

the transfer of assets and liabilities to the transferee in the course of the merger is made in exchange for the issue of shares or debentures by the transferee to each person holding shares in or debentures of a transferor, or

b

that transfer is not so made only because, and only so far as, the transferee is prevented from so issuing such shares or debentures by section 658 of the Companies Act 2006 (c. 46) (general rule against limited company acquiring own shares) or by a corresponding provision of the law of F6a member State preventing such an issue.

8

Condition F is that in the course of the merger each transferor ceases to exist without being in liquidation (within the meaning given by section 247 of the Insolvency Act 1986 (c. 45)).

9

Condition G is that—

a

in the course of the merger a company resident in the United Kingdom (“company A”) transfers to a company resident in F3a member State all assets and liabilities relating to a business which company A carried on in a member State F8... through a permanent establishment, and

b

that transfer includes the transfer of an asset or liability representing a loan relationship.

10

In this Chapter,

F5a

“the merger” and “the merging companies” have the same meaning as in this section

F9b

“relevant state” means the United Kingdom or a member State.

11

See—

a

section 432 for the meaning of “the transferee” and “transferor”, and

b

section 439 for the meaning of “company”, “co-operative society” and “resident in a F7relevant state”.

432Meaning of “the transferee” and “transferor”

1

In this Chapter, “the transferee” means—

a

in relation to a merger within section 431(3)(a), the SE,

b

in relation to a merger within section 431(3)(b), the SCE, and

c

in relation to a merger within section 431(3)(c) or (d), the company to which assets and liabilities are transferred.

2

In this Chapter “transferor” means—

a

in relation to a merger within section 431(3)(a), a company merging to form the SE,

b

in relation to a merger within section 431(3)(b), a co-operative society merging to form the SCE, and

c

in relation to a merger within section 431(3)(c) or (d), a company transferring all its assets and liabilities.