Section 561A Transfer of asset by reason of cross-border merger
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Amendments
Section 561A substituted by S.I. 2007/3186 regulation 3(2) and Schedule 2 para 14 in relation to mergers relating to the formation of an SE or SCE which take place on or after 18 August 2006, and in relation to all other mergers which take place on or after 1 January 2007.
(1) This section applies to the transfer of a qualifying asset as part of the process of a merger to which section 140E(74) of TCGA 1992 (mergers: assets within UK tax charge) applies (or would apply but for section 140E(2)(c)).
(2) Where this section applies to a transfer—
(a) the transfer does not give rise to any allowance or charge under this Act,
(b) anything done to or by the transferor in relation to assets transferred is to be treated after the transfer as having been done to or by the transferee (with any necessary apportionment of expenditure being made in a reasonable manner), and
(c) section 343 of ICTA(75) (company reconstruction without change of ownership) shall not apply.
(3) For the purposes of subsection (1) an asset is a “qualifying asset” if—
(a) it is transferred to the transferee as part of the process of the merger, and
(b) subsections (4) and (5) are satisfied in respect of it.
(4) This subsection is satisfied in respect of an asset if—
(a) the transferor is resident in the United Kingdom at the time of the transfer, or
(b) the asset is an asset of a permanent establishment in the United Kingdom of the transferor.
(5) This subsection is satisfied in respect of an asset if—
(a) the transferee is resident in the United Kingdom at the time of the transfer, or
(b) the asset is an asset of a permanent establishment of the transferee in the United Kingdom immediately following the transfer.
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