Section 216 | Assets transferred from society to company.

(1)This section and section 217 apply where there is a transfer of the whole of a building society’s business to a company (“the successor company”) in accordance with section 97 and the other applicable provisions of the Building Societies Act 1986.

(2)Where the society and the successor company are not members of the same group at the time of the transfer—

(a)they shall be treated for the purposes of corporation tax on capital gains as if any asset disposed of as part of the transfer were acquired by the successor company for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the society, and

(b)if because of the transfer any company ceases to be a member of the same group as the society, that event shall not cause section ... 179 to have effect as respects any asset acquired by the company from the society or any other member of the same group.^F1

(3)Where the society and the successor company are members of the same group at the time of the transfer but later cease to be so, that later event shall not cause section ... 179 to have effect as respects—^F2

(a)any asset acquired by the successor company on or before the transfer from the society or any other member of the same group, or

(b)any asset acquired from the society or any other member of the same group by any company other than the successor company which is a member of the same group at the time of the transfer.

(4)Subject to subsection (6) below, where a company which is a member of the same group as the society at the time of the transfer—^F2

(a)ceases to be a member of that group and becomes a member of the same group as the successor company, and

(b)subsequently ceases to be a member of that group,

section ... 179 shall have effect on that later event as respects any relevant asset acquired by the company otherwise than from the successor company as if it had been acquired from the successor company.

(5)In subsection (4) above “relevant asset” means any asset acquired by the company—

(a)from the society, or

(b)from any other company which is a member of the same group at the time of the transfer,

when the company and the society, or the company, the society and the other company, were members of the same group.

(6)Subsection (4) above shall not apply if the company which acquired the asset and the company from which it was acquired (one being a 75 per cent. subsidiary of the other) cease simultaneously to be members of the same group as the successor company but continue to be members of the same group as one another.

(7)For the purposes of this section “group” shall be construed in accordance with section 170.