Section 195B — Taxation of Chargeable Gains Act 1992: Licence-consideration swap

Licence-consideration swap 195B 1 This section applies to a licence-consideration swap.

2 Each company participating in the swap is to be treated as follows.

3 As regards the licence, or each licence, which the company disposes of, the company is to be treated as if it had disposed of that licence for a consideration of such amount as to secure that on the disposal neither a gain nor a loss accrues to the company.

4 In a case where the company acquires only one licence, the company is to be treated as if it had acquired the licence for a consideration of the same amount as the deemed disposal consideration.

5 In a case where the company acquires two or more licences, as regards each licence acquired, the company is to be treated as if it had acquired that licence for a consideration of— DDC × A TA where— DDC is the deemed disposal consideration, A is the value of the licence acquired, and TA is total value of all the licences acquired.

6 In this section “ deemed disposal consideration ”, in relation to a company participating in the swap, means—

a the amount of the consideration for which the company is, under subsection (3), treated as having disposed of its licence (if the company disposes of only one licence), or b the aggregate of all such amounts (if the company disposes of two or more licences).