Corporation Tax Act 2009 section 437

Tax avoidance etc.

Section 437 prevents the European cross-border merger rules in this Chapter from applying where a merger lacks genuine commercial reasons or is carried out to avoid tax, unless HMRC clearance has been obtained in advance.

• The Chapter is disapplied if the merger is not carried out for genuine commercial reasons
• The Chapter is also disapplied if a main purpose of the merger (or any scheme it forms part of) is avoiding corporation tax, capital gains tax or income tax
• Companies can protect themselves by applying to HMRC before the merger for confirmation that the anti-avoidance rule will not apply
• The clearance application procedure follows the same process as that set out for cross-border transfers of business under sections 427 and 428