(This note is not part of the Order)
This Order deals with tax consequences in the case of a transfer (“a relevant transfer”) under a transfer scheme made under section 23 of the Public Bodies Act 2011 (c. 24) transferring property, rights or liabilities from BRB (Residuary) Limited (“BRB Residuary”) to the Secretary of State for Transport, London & Continental Railways Limited (“LCR”), Network Rail Infrastructure Limited (“Network Rail”) or the Rail Safety and Standards Board Limited. The Order deals with the tax consequences for BRB Residuary, LCR and Network Rail.
Article 3 provides that for the purposes of the Taxation of Chargeable Gains Act 1992 (c. 12) (“TCGA”) a disposal under a relevant transfer to LCR or the Secretary of State is to be treated as being for a consideration such that no gain or loss accrues to BRB Residuary. In the case of a disposal of an asset constituted by a relevant transfer to Network Rail, section 17 of TCGA (disposals and acquisitions treated as made at market value) is not to have effect. Instead, where consideration is given by Network Rail, the disposal is to be treated as made for an amount equal to the value of that consideration, and, where no such consideration is given, it is treated as made for a consideration of nil.
Article 4 provides for continuity of treatment in relation to any allowances or charges under the Capital Allowances Act 2001 (c. 2) which relate to part of BRB Residuary’s property business transferred to LCR by a relevant transfer.
Article 5 provides for the transfer of losses for corporation tax purposes in respect of unrelieved losses incurred by BRB Residuary in relation to part of BRB Residuary’s property business transferred to LCR by a relevant transfer.
Article 6 provides for provisions made in the accounts of BRB Residuary and LCR in relation to property, rights or liabilities transferred by a relevant transfer.
Article 7 provides for continuity of treatment for corporation tax purposes in the case of a relevant transfer transferring loan relationships to LCR. BRB Residuary and LCR are to be treated as if they were members of the same group.
Article 8 deals with stamp duty. Stamp duty is not chargeable on an instrument making or executing a relevant transfer to LCR.
A Tax Information and Impact Note covering this Order will be published on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm.