Section 336 | Transfers of loans on group transactions

(1)The case referred to in section 335(1)(a) is where—

(a)there is a transaction within subsection (2) or a series of transactions within subsection (3), and

(b)as a result one of the companies involved (“the transferee”) directly or indirectly replaces the other (“the transferor”) as a party to a loan relationship.

(2)A transaction is within this subsection if it is a related transaction between two companies which are—

(a)members of the same group, and

(b)within the charge to corporation tax in respect of that transaction.

(3)A series of transactions is within this subsection if it is a series having the same effect as a related transaction between two companies each of which—

(a)has been a member of the same group at any time in the course of that series, and

(b)would be within the charge to corporation tax in respect of such a related transaction.

(4)This Chapter does not apply as a result of this section in relation to—^F1

(a)a transfer of an asset, or

(b)a transfer of rights under, or an interest in, an asset,

as a result of a transaction within subsection (2) or a series of transactions within subsection (3) if immediately before or after the transfer the asset is held for the purposes of a company's long-term business.

(4A)For the purposes of subsection (4)—^F2

(a)in the case of an overseas life insurance company, ignore transfers in relation to assets which are not UK assets (within the meaning of section 117 of FA 2012), and^F2

(b)section 122 of that Act applies as it applies for the purposes of Chapter 8 of Part 2 of that Act.^F2

(5)In this Chapter, in relation to a case within subsection (1), “the transferee” and “the transferor” have the same meaning as in that subsection.