Taxation of Chargeable Gains Act 1992 section 140C

Transfer or division of non-UK business

Section 140C provides relief where a UK resident company transfers all or part of a business operated through a permanent establishment in a member state to a company resident in a member state, allowing losses on the transfer to be netted against gains to produce a single chargeable gain.

• A UK resident company transferring a non-UK business (operated through a permanent establishment in a member state) to a member state resident company may claim relief where the transfer is made wholly or partly in exchange for shares or debentures and the total chargeable gains exceed the total allowable losses
• The section also covers partial divisions, where a UK company transfers part of its business to one or more companies (at least one resident in a member state), provided the transferor continues to carry on a business after the transfer and shares or debentures are issued to the transferor's shareholders
• Where the section applies, all allowable losses arising on the transfer are set against all chargeable gains, and the net amount is treated as a single chargeable gain — with notional double taxation relief available under section 122 of TIOPA 2010
• No claim may be made under this section if a claim has already been made under section 140 in relation to the same transfer, and the anti-avoidance provisions in section 140D must not prevent the section from applying