Corporation Tax Act 2009 section 822

Transfer of assets on European cross-border merger

Section 822 provides for the tax-neutral transfer of intangible fixed assets when companies merge across European borders, subject to certain conditions being met.

• When a European cross-border merger takes place and certain conditions are satisfied, the transfer of qualifying intangible assets is treated as tax-neutral, meaning no taxable gain or loss arises on the transfer under the intangible fixed assets rules.
• A qualifying asset is one that counts as a chargeable intangible asset for both the company transferring it (immediately before the transfer) and the company receiving it (immediately after the transfer).
• This tax-neutral treatment is not available if the transfer already qualifies for relief under the company reconstruction rules, or if any of the merging companies is a transparent entity whose assets and liabilities are transferred to another company as part of the merger.
• The merger must meet the genuine commercial transaction requirement — meaning it must be carried out for bona fide commercial reasons and not as part of a scheme whose main purpose is the avoidance of tax.