Section 195B | Licence-consideration swap ^F1

From legislation.gov.uk

(1)This section applies to a licence-consideration swap.^F1

(2)Each company participating in the swap is to be treated as follows.^F1

(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.^F1

(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.^F1

(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—^F1

Formula

DDC \times \frac{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—^F1

(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^F1

(b)the aggregate of all such amounts (if the company disposes of two or more licences).^F1