Section 140C: Transfer or division of non-UK business, Taxation of Chargeable Gains Act 1992

This section applies where—

a company resident in the United Kingdom (the transferor) transfers to a company resident in a member State (the transferee) the whole or part of a business which, immediately before the time of the transfer, the transferor carried on in a member State ... through a permanent establishment,

the transfer includes the whole of the assets of the transferor used for the purposes of the business or part (or the whole of those assets other than cash),

the transfer is wholly or partly in exchange for shares or debentures issued by the transferee to the transferor,

the aggregate of the chargeable gains accruing to the transferor on the transfer exceeds the aggregate of the allowable losses so accruing,

a claim is made under this section by the transferor, and

section 140D does not prevent this section applying.

This section also applies where a company resident in the United Kingdom transfers part of its business to one or more companies if—

the part of the transferor's business which is to be transferred is carried on, immediately before the time of the transfer, by the transferor in a member State ... through a permanent establishment,

at least one transferee is resident in a member State ...,

the transferor company continues to carry on a business after the transfer,

the conditions in subsection (1)(b), (d), (e) and (f) are satisfied, and

either of the following conditions is satisfied.

Condition 1 is that the transfer is made in exchange for the issue of shares in or debentures of each transferee company to the persons holding shares in or debentures of the transferor.

Condition 2 is that the transfer is not made in exchange for the issue of shares in or debentures of each transferee by reason only, and to the extent only, that a transferee is prevented from complying with Condition 1 by section 658 of the Companies Act 2006 (rule against limited company acquiring own shares) or by a corresponding provision of the law of a member State preventing the issue of shares or debentures to itself.

In a case where this section applies, this Act shall have effect in accordance with subsection (3) below.

The allowable losses accruing to the transferor on the transfer shall be set off against the chargeable gains so accruing and the transfer shall be treated as giving rise to a single chargeable gain equal to the aggregate of those gains after deducting the aggregate of those losses.

No claim may be made under this section as regards a transfer in relation to which a claim is made under section 140.

In a case where this section applies, section 122 of TIOPA 2010 (tax treated as chargeable in respect of gains on transfer of non-UK business) shall also apply.

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Section 140C: Transfer or division of non-UK business

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