Division of UK businessU.K.
2.—(1) Section 140A (transfer of a UK trade) M1 is amended as follows.
(2) In subsection (1)—
(a)for “company A” substitute “ the transferor ”,
(b)for “company B” substitute “ the transferee ”,
(c)for “qualifying company” substitute “ company ”, and
(d)for “trade” substitute “ business ”.
(3) After subsection (1) insert—
“(1A) This section also applies where a company transfers part of its business to one or more companies if—
(a)the transferor is resident in one member State,
(b)the part of the transferor's business which is to be transferred is carried on by the transferor in the United Kingdom,
(c)at least one transferee is resident in a member State other than that in which the transferor is resident,
(d)the transferor company continues to carry on a business after the transfer,
(e)the conditions in subsection (1)(c) to (e) are satisfied (for which purpose references to the transferee shall be taken as references to each of the transferees), and
(f)either of the following conditions is satisfied.
(1B) Condition 1 is that the transfer is made in exchange for the issue of shares in or debentures of each transferee company to the persons holding shares in or debentures of the transferor.
(1C) Condition 2 is that the transfer is not made in exchange for the issue of shares in or debentures of each transferee by reason only, and to the extent only, that a transferee is prevented from complying with Condition 1 by section 658 of the Companies Act 2006 M2 (rule against limited company acquiring own shares) or by a corresponding provision of the law of another member State preventing the issue of shares or debentures to itself.
(1D) If Condition 2 applies in relation to the whole or part of a transfer, sections 24 and 122 do not apply in relation to the transfer.”.
(4) In subsections (2) to (4)—
(a)for “company A” substitute “ the transferor ”, and
(b)for “company B” substitute “ the transferee (or each of the transferees) ”.
(5) In subsection (4) for “the two companies” substitute “ the transferor and the transferee (or each of the transferees) ”.
(6) Omit subsections (5), (6) and (7).
(7) The heading accordingly becomes “ “Transfer or division of UK business ”.
Marginal Citations
M1Sections 140A and 140B were inserted by section 44 of the Finance (No. 2) Act 1992 (c. 48).