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Legislation
Taxation of Chargeable Gains Act 1992

Crossheading Transparent entities: disapplication of reliefs related to Mergers Directive

  • Section 140H Share exchanges
  • Section 140I Division of business or transfer of assets
  • Section 140J Mergers
  • Section 140K Transparent entities: taxation after merger, &c
  • Section 140L Interpretation
  1. Transparent entities: disapplication of reliefs related to Mergers Directive
  2. Division of business or transfer of assets

Section 140I | Division of business or transfer of assets F1

From legislation.gov.uk

(1)This section applies in relation to a transfer of a business, or part of a business, where—

(a)the transfer is of a kind mentioned in section 140A(1) or (1A) (or which would be of such a kind if the business, or the part of the business, transferred were carried on by the transferor in the United Kingdom and the condition mentioned in section 140A(1)(e) were satisfied in relation to the transferee, or each of the transferees), andF2

(b)either the transferor or the transferee, or one of the transferees, is a transparent entity.

(2)Where this section applies—

(a)if the transferor is a transparent entity, sections 140A and 140DA do not apply in relation to the transfer;

(b)if a transferee is a transparent entity, section 140DA does not apply in relation to the transfer to it.

(3)If, as a result of a transfer in relation to which this section applies, a transfer 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.F3F4F5

(4)In subsection (3) “transfer 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 the transferee.

(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 transfer are set against gains arising on the transfer, and

(b)any relief available under that law has been claimed.

Notes

  1. F1

    Ss. 140H-140L and cross-heading inserted (with effect in accordance with reg. 3(3) of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (S.I. 2007/3186), reg. 1(2), Sch. 3 para. 1 (with S.I. 2008/1579, reg. 4(2))

  2. F2

    Words in s. 140I(1)(a) substituted (with effect in accordance with reg. 3 of the amending S.I.) by The Corporation Tax (Implementation of the Mergers Directive) Regulations 2008 (S.I. 2008/1579), reg. 1(2), Sch. 1 para. 5

  3. F3

    Words in s. 140I(3) omitted (31.12.2020) by virtue of The Taxes (Amendments) (EU Exit) Regulations 2019 (S.I. 2019/689), regs. 1, 6(10) (with regs. 39-41); 2020 c. 1, Sch. 5 para. 1(1)

  4. F4

    Words in s. 140I(3) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 44(a) (with Sch. 9 paras. 1-9, 22)

  5. F5

    Words in s. 140I(3) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 44(b) (with Sch. 9 paras. 1-9, 22)

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