Section 140H — Taxation of Chargeable Gains Act 1992: Share exchanges

Share exchanges 140H 1 This section applies if—

a a company (“company B”) issues shares or debentures to a person in exchange for shares in or debentures of another company (“company A”),

b the exchange falls within one of the cases specified in section 135(2),

and c either company B or company A or both is a transparent entity.

2 Where this section applies—

a “company” in section 135 shall be treated as meaning an entity listed in Part A of Annex I to the Mergers Directive, and b section 135(3) does not apply.

3 If, as a result of an exchange in relation to which this section applies, a gain accruing to a person holding shares in or debentures of company A on the exchange would, but for the Mergers Directive, have been chargeable to tax under the law of a member State ... , Part 2 of TIOPA 2010 (double taxation relief), including any double taxation relief arrangements , shall apply as if that tax, calculated in accordance with subsection (4), had been chargeable.

4 Tax is calculated in accordance with this subsection if—

a so far as permitted under the law of the relevant member State, losses arising on the exchange are set against gains arising on the exchange, and b any relief available to company A under that law has been claimed.