Corporation Tax Act 2009 section 674

Introduction to Chapter

Section 674 sets out the conditions under which the special rules for European cross-border transfers of business apply to derivative contracts, and explains the claim requirement that companies must satisfy.

• The chapter applies when either Condition A (a whole or partial business transfer between companies in different relevant states wholly in exchange for shares or debentures) or Condition B (a partial business transfer where the transferor continues trading and shares or debentures are issued to the transferor's shareholders) is met, and all companies involved make a claim.
• In both cases, the business being transferred must be carried on in the United Kingdom, the transferee must be within the charge to corporation tax immediately after the transfer, and the companies must be resident in a "relevant state" (meaning the United Kingdom or an EU Member State).
• The chapter will not apply where there is a tax avoidance motive or where transparent entities are involved in the transaction.
• Key terms such as "relevant state", "the transfer of business", "transferee", "the transferor", "company" and "resident in a relevant state" are specifically defined for the purposes of this chapter.