Valid from 01/04/2009
(1)This Chapter applies if—
(a)condition A or B is met, and
(b)each of the companies mentioned in subsection (2)(a) or (3)(a) makes a claim under this section,
but see section 677 (tax avoidance etc) and section 680 (disapplication of Chapter where transparent entities involved).
(2)Condition A is that—
(a)a company resident in one member State transfers to a company resident in another member State the whole or part of a business carried on in the United Kingdom,
(b)the transfer is wholly in exchange for shares or debentures issued by the transferee to the transferor, and
(c)immediately after the transfer the transferee is within the charge to corporation tax.
(3)Condition B is that—
(a)a company transfers part of its business to one or more companies,
(b)the transferor is resident in one member State,
(c)the part of the transferor's business which is transferred is carried on by the transferor in the United Kingdom,
(d)at least one transferee is resident in a member State other than that in which the transferor is resident (and each transferee is resident in a member State, but not necessarily the same one),
(e)the transferor continues to carry on a business after the transfer,
(f)immediately after the transfer each transferee is within the charge to corporation tax, and
(g)the transfer—
(i)is made in exchange for the issue of shares in or debentures of each transferee to each person holding shares in or debentures of the transferor, or
(ii)is not so made only because, and only so far as, a 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 another member State preventing such an issue.
(4)In this Chapter—
“the transfer of business” means the transfer of business mentioned in subsection (2)(a) or (3)(a),
“transferee” has the same meaning as in subsection (2) or (3), and
“the transferor” has the same meaning as in subsection (2) or (3).
(5)For the meaning of “company” and “resident in a member State”, see section 681.
(1)This section applies if in the course of the transfer of business the transferor transfers the rights and liabilities under a derivative contract to a transferee.
(2)For the purpose of determining the credits and debits to be brought into account in respect of the derivative contract in accordance with this Part, the transferor and the transferee are treated as having entered into the transfer of those rights and liabilities for consideration of an amount equal to the notional carrying value of the contract.
(3)For the purposes of this section, the notional carrying value of a contract is the amount which would have been its carrying value in the accounts of the transferor if a period of account had ended immediately before the date when the transferor ceased to be a party to the contract.
(4)This section is subject to section 676 (transferor using fair value accounting).
(1)This section applies instead of section 675 if, in a case where that section would otherwise apply, the transferor uses fair value accounting as respects the derivative contract.
(2)The amount which is to be brought into account by the transferor in respect of the transfer of the rights and liabilities mentioned in section 675(1) is the fair value of the derivative contract as at the date of transfer to the transferee.
(3)For any accounting period in which the transferee is a party to the derivative contract, for the purpose of determining the credits and debits to be brought into account in respect of the contract in accordance with this Part, the transferee is treated as if it had acquired the contract for consideration of an amount equal to the fair value of the contract as at the date of transfer to it.
(1)This Chapter does not apply in relation to the transfer of business if—
(a)the transfer of business is not effected for genuine commercial reasons, or
(b)the transfer of business 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 transfer of business—
(a)the companies mentioned in section 674(2)(a) or (3)(a) have applied to the Commissioners for Her Majesty's Revenue and Customs, and
(b)the Commissioners have notified them that they are satisfied that subsection will not have that effect.
(1)This section applies in relation to an application under section 677(2).
(2)The application must be in writing and must contain particulars of the operations which are to be effected.
(3)The Commissioners for Her Majesty's Revenue and Customs may by notice require the applicant to provide further particulars for the purpose of enabling them to make their decision.
(4)Such a notice may only be given within 30 days of the receipt of the application or of any further particulars previously required under subsection (3).
(5)If such a notice is not complied with within 30 days or such longer period as the Commissioners for Her Majesty's Revenue and Customs may allow, they need not proceed further on the application.
(1)The Commissioners for Her Majesty's Revenue and Customs must notify their decision on an application under section 677(2) to the applicant—
(a)within 30 days of receiving the application, or
(b)if they give a notice under section 678(3), within 30 days of the notice being complied with.
(2)If the Commissioners for Her Majesty's Revenue and Customs—
(a)notify the applicant that they are not satisfied as mentioned in section 677(2)(b), or
(b)do not notify their decision to the applicant within the time required by subsection (1),
the applicant may within 30 days of the notification or of that time require them to transmit the application to the tribunal, together with any notice given and further particulars provided under section 678(3).
(3)In that case any notification by the tribunal has effect for the purposes of section 677(2)(b) as if it were a notification by the Commissioners for Her Majesty's Revenue and Customs.
(4)If any particulars provided under section 678 do not fully and accurately disclose all facts and considerations material for the decision—
(a)of the Commissioners for Her Majesty's Revenue and Customs, or
(b)of the tribunal,
any resulting notification by the Commissioners for Her Majesty's Revenue and Customs or the tribunal is void.
(1)This Chapter does not apply in relation to the transfer of business if the transferor is a transparent entity.
(2)In this section “transparent entity” means a company which is resident in a member State other than the United Kingdom and which does not have an ordinary share capital.
(1)In this Chapter “company” means any entity listed as a company in the Annex to the Mergers Directive.
(2)For the purposes of this Chapter, 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 purpose of any double taxation relief arrangements to which the State is a party, as resident in a territory not within a member State.