Corporation Tax Act 2010

Arrangements for transfers of companies

154 Arrangements for transfer of member of group of companies etc

(1) This section applies if, apart from this section, one company (“the first company”) and another company (“the second company”) would be members of the same group of companies.

(2) For the purposes of this Part the companies are not members of the same group of companies if—

(a) one of the companies has surrenderable amounts for an accounting period (“the current period”), and

(b) arrangements within subsection (3) are in place.

(3) Arrangements are within this subsection if they have any of the following effects.

• Effect 1

  At some time during or after the current period, the first company or any successor of it—

  (a)

  could cease to be a member of the same group of companies as the second company, and

  (b)

  could become a member of the same group of companies as a third company (see subsection (4)).

• Effect 2

  At some time during or after the current period a person (other than the first or second company) has or could obtain, or persons together (other than those companies) have or could obtain, control of the first company but not of the second company.

• Effect 3

  At some time during or after the current period, a third company could start to carry on the whole or a part of a trade that at a time during the current period is carried on by the first company and could do so—

  (a)

  as the successor of the first company, or

  (b)

  as the successor of another company which is not a third company and which started to carry on the whole or a part of the trade during or after the current period.

(4) A “third company” means a company that is not, apart from any arrangements within subsection (3), a member of the same group of companies as the first company.

155 Arrangements for transfer of company owned by consortium etc

(1) This section applies if, apart from this section, a trading company would be owned by a consortium.

(2) The trading company is not owned by the consortium if—

(a) for an accounting period (“the current period”) the trading company or a member of the consortium has surrenderable amounts, and

(b) arrangements within subsection (3) are in place.

(3) Arrangements are within this subsection if they have any of the following effects.

• Effect 1

  The trading company or a successor of it could, at some time during or after the current period, become a 75% subsidiary of a third company (see subsection (4)).

• Effect 2

  Any person who owns, or any persons who together own, less than 50% of the ordinary share capital of the trading company—

  (a)

  has, or together have, control of the trading company, or

  (b)

  could obtain such control at some time during or after the current period.

• Effect 3

  Any person (“P”), either alone or together with persons connected with P—

  (a)

  holds or could obtain at least 75% of the qualifying votes, or

  (b)

  controls or could control the exercise of at least 75% of those votes.

  For this purpose—

  • “connected” is to be read in accordance with section 1122 but as if subsection (4) of that section were omitted, and

  • “qualifying votes” means the votes which may be cast in a poll taken at a general meeting of the trading company held during or after the current period.

• Effect 4

  A third company could start to carry on the whole or a part of a trade that at a time during the current period is carried on by the trading company and could do so—

  (a)

  as the successor of the trading company, or

  (b)

  as the successor of another company which is not a third company and which started to carry on the whole or a part of the trade during or after the current period.

(4) A “third company” means a company that is not, apart from any arrangements within subsection (3), a member of the same group of companies as the trading company.

(5) If the trading company would, apart from this section, be owned by a consortium as a result of section 153(3) (consortiums involving holding companies)—

(a) references in this section (apart from references under Effect 4) to the trading company are to be read as including references to the holding company concerned, and

(b) Effect 3 does not apply if P is that holding company.

156 Sections 154 and 155: supplementary

(1) This section applies for the purposes of sections 154 and 155.

(2) “Arrangements”—

(a) means arrangements of any kind (whether or not in writing), but

(b) does not include a power of a Minister of the Crown, the Scottish Ministers or a Northern Ireland department to give directions to a statutory body as to the disposal of assets belonging to the body or to a subsidiary of the body.

(3) A company is the successor of another company if it carries on a trade which, in whole or in part, the other company used to carry on and the circumstances are such that—

(a) Chapter 1 of Part 22 (transfers of trade without a change of ownership) applies in relation to the companies as, respectively, the successor and the predecessor within the meaning of that Chapter, or

(b) the two companies are connected with each other in accordance with section 1122.