Corporation Tax Act 2009 section 1036

Transfer of qualifying business by group transfers

Section 1036 redirects corporation tax relief for employee share acquisitions to a successor company where the employing company's qualifying business has been transferred within the group during the period between the share acquisition (or option grant) and the chargeable event (or the employee's death).

• Where all or substantially all of a qualifying business is transferred during the interim period through one or more group transfers, the relief is redirected away from the original employing company
• The business must end up being carried on by one or more successor companies, none of which is the original employing company — if there are multiple successors, they must nominate one of them to receive the relief
• The interim period runs from the date the shares were acquired (or the option was obtained) to the date of the chargeable event (or, if applicable, the employee's death)
• Both conditions must be satisfied: all transfers must be group transfers (Condition A), and by the end of the interim period the whole or substantially the whole of the qualifying business must be carried on by one or more successor companies other than the employing company (Condition B)