Section 140A — Taxation of Chargeable Gains Act 1992: Transfer or division of UK business

Transfer or division of UK business 140A 1 This section applies where—

a a company resident in one relevant state ( the transferor ) transfers the whole or part of a business carried on by it in the United Kingdom to a company resident in another relevant state ( the transferee ),

b the transfer is wholly in exchange for shares or debentures issued by the transferee to the transferor , c a claim is made under this section by the transferor and the transferee , d section 140B does not prevent this section applying, and e the appropriate condition is met in relation to the transferee immediately after the time of the transfer. 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 relevant 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 relevant 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 (rule against limited company acquiring own shares) or by a corresponding provision of the law of a 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.

2 Where immediately after the time of the transfer the transferee (or each of the transferees) is not resident in the United Kingdom, the appropriate condition is that were it to dispose of the assets included in the transfer any chargeable gains accruing to it on the disposal would form part of its chargeable profits for corporation tax purposes by virtue of section 2B(3) .

3 Where immediately after the time of the transfer the transferee (or each of the transferees) is resident in the United Kingdom, the appropriate condition is that none of the assets included in the transfer is one in respect of which, by virtue of the asset being of a description specified in double taxation relief arrangements, the company falls to be regarded for the purposes of the arrangements as not liable in the United Kingdom to tax on gains accruing to it on a disposal.

4 Where this section applies—

a the transferor and the transferee (or each of the transferees) shall be treated, so far as relates to corporation tax on chargeable gains, as if any assets included in the transfer were acquired by the transferee (or each of the transferees) from the transferor for a consideration of such amount as would secure that on the disposal by way of transfer neither a gain nor a loss would accrue to the transferor ;

b section 25(3) shall not apply to any such assets by reason of the transfer (if it would apply apart from this paragraph). 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .