Section 339 — Corporation Tax Act 2009: Issues of new securities on certain cross-border reorganisations

Issues of new securities on certain cross-border reorganisations 339 1 The case referred to in section 335(1)(c) is where each of conditions A to D is met.

2 Condition A is that sections 127 to 130 of TCGA 1992 (reorganisations: equation of original shares and new holding)—

a apply in relation to an exchange as a result of section 135(3) of that Act (which provides for sections 127 to 130 to apply to an exchange of securities for those in another company as if it were a reorganisation), or b would so apply but for section 116(5) of that Act (which disapplies sections 127 to 130 where the original shares or the new holding consist of or include a qualifying corporate bond).

3 Condition B is that the original shares consist of or include an asset representing a loan relationship.

4 Condition C is that company A is resident in one member State and company B is resident in another member State.

5 For the purposes of this section a company is resident in a member State if—

a it is within a charge to tax under the law of the State as being resident for that purpose, and b it is not regarded, for the purpose of any double taxation relief arrangements to which the State is a party, as resident in a territory not within a member State.

6 Condition D is that neither Chapter 13 (European cross-border transfers of business) nor Chapter 14 (European cross-border mergers) applies in relation to the exchange.

7 In this section—

a “ company A ” and “ company B ” have the same meaning as in section 135 of TCGA 1992, b “ original shares ” has the same meaning as it has for the purposes of sections 126 to 131 of that Act, as applied by section 135 of that Act, and c “ receiving company ” means the company to which the issue of shares in or debentures of company B mentioned in section 135(1) of that Act is made.

8 If company B is a company to which section 135(5) of TCGA 1992 applies (companies with no share capital), the reference in subsection (7)(c) to the shares in or debentures of company B includes a reference to any interests in the company possessed by its members.