Taxation of Chargeable Gains Act 1992 section 140D

Section 140C: anti-avoidance

Section 140D provides the anti-avoidance safeguards that apply to the tax-neutral treatment of transfers or divisions of non-UK businesses under section 140C.

• The section 140C relief only applies if the business transfer is carried out for genuine commercial reasons and is not part of a tax avoidance scheme
• The main purpose, or one of the main purposes, of the arrangements must not be the avoidance of income tax, corporation tax or capital gains tax
• The transferor company can apply to HMRC in advance for clearance confirming that the commercial reasons test is met, which removes the anti-avoidance restriction
• The advance clearance procedure follows the same rules as set out in section 138 subsections (2) to (5), which govern how such applications are made and handled