Corporation Tax Act 2009

431 Introduction to Chapter U.K.

(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 [F1 the 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 [F2 relevant state].

(5) Condition C is that the merging companies are not all resident in the same [F3 relevant 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 [F4 a] 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 [F5 a] member State all assets and liabilities relating to a business which company A carried on in a member State F6 ... through a permanent establishment, and

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

(10) In this Chapter,

[F7 (a)] “the merger” and “the merging companies” have the same meaning as in this section

[F8 (b) “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 [F9 relevant state]”.

Textual Amendments

F1 Words in Act substituted (1.8.2014) by virtue of Co-operative and Community Benefit Societies Act 2014 (c. 14), s. 154, Sch. 4 para. 142 (with Sch. 5)

F2 Words in s. 431(4) substituted (31.12.2020) by The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 16(7)(a) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)

F3 Words in s. 431(5) substituted (31.12.2020) by The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 16(7)(b) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)

F4 Word in s. 431(7)(b) substituted (31.12.2020) by The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 16(7)(c) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)

F5 Word in s. 431(9)(a) substituted (31.12.2020) by The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 16(7)(d)(i) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)

F6 Words in s. 431(9)(a) omitted (31.12.2020) by virtue of The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 16(7)(d)(ii) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)

F7 Words in s. 431(10) renumbered as s. 431(10)(a) (31.12.2020) by The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 16(7)(e)(i) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)

F8 S. 431(10)(b) inserted (31.12.2020) by The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 16(7)(e)(ii) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)

F9 Words in s. 431(11)(b) substituted (31.12.2020) by The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 16(7)(f) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)