Section 140J — Taxation of Chargeable Gains Act 1992: Mergers

Mergers 140J 1 This section applies in relation to a merger if—

a the merger is of a kind mentioned in section 140E(1) , b the conditions in section 140E(2) are satisfied in relation to the merger, and c one or more of the merging companies is a transparent entity.

2 Where this section applies—

a if the assets and liabilities of a transparent entity are transferred to another company by reason of the merger, sections 140E and 140G shall not apply;

b if the assets and liabilities of one or more other companies are transferred to a transparent entity by reason of the merger section 140G shall not apply.

3 If, as a result of a merger in relation to which this section applies, a merger gain 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 (5), had been chargeable.

4 In subsection (3) “merger gain” means a gain accruing to a transparent entity (or which would be treated as accruing to that entity were it not transparent) by reason of the transfer of assets by the transparent entity to another company on the merger.

5 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 merger are set against gains arising on the merger, and b any relief available under that law has been claimed.