After subsection (1) insert—

“(1A)

This section also applies where a company resident in the United Kingdom transfers part of its business to one or more companies if—

(a)

the part of the transferor's business which is to be transferred is carried on, immediately before the time of the transfer, by the transferor in a member State other than the United Kingdom through a permanent establishment,

(b)

at least one transferee is resident in a member State other than the United Kingdom,

(c)

the transferor company continues to carry on a business after the transfer,

(d)

the conditions in subsection (1)(b), (d), (e) and (f) are satisfied, and

(e)

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 (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.”.