Taxation of Chargeable Gains Act 1992 section 140B

Section 140A: anti-avoidance

Section 140B introduces anti-avoidance provisions that restrict the tax relief available under section 140A when a UK business is transferred to a company in another relevant state.

• The tax relief under section 140A only applies if the business transfer is carried out for genuine commercial reasons and is not part of a tax avoidance scheme.
• If the main purpose, or one of the main purposes, of the arrangements is to avoid income tax, corporation tax or capital gains tax, the relief will be denied.
• Companies can apply to HMRC in advance for clearance confirming that the transfer qualifies, by making a joint application from both the transferor and the transferee.
• The advance clearance procedure follows the same rules as set out in section 138, which governs clearance applications for company reconstructions.