The Corporation Tax (Implementation of the Mergers Directive) Regulations 2008
Made
16th June 2008
Laid before Parliament
17th June 2008
Coming into force
8th July 2008
The Treasury make the following Regulations in exercise of the powers conferred by section 110 of the Finance Act 2007(1).
The Treasury are satisfied in accordance with section 110(3) of the Finance Act 2007 that the following Regulations are necessary for the purposes of complying with the United Kingdom’s obligations under the Mergers Directive(2).
“TCGA 1992” means the Taxation of Chargeable Gains Act 1992(3),
“FA 1996” means the Finance Act 1996(4), and
“FA 2002” means the Finance Act 2002(5).
3-
Amendments to primary legislation
(1)
Schedules 1 to 3 to these Regulations make amendments to TCGA 1992, FA 1996 and FA 2002 relating to cross-border mergers and cross-border transfers of business.
(2)
Those Schedules have effect—
(a)
so far as relating to mergers—
(i)
in relation to mergers relating to the formation of an SE or SCE which take place on or after 18th August 2006, and
(ii)
in relation to all other mergers which take place on or after 1st January 2007, and
(b)
so far as relating to transfers, in relation to transfers which take place on or after 1st January 2007.
4-
Commencement of 2007 Regulations
(1)
Regulation 3(1) of the Corporation Tax (Implementation of the Mergers Directive) Regulations 2007(6) is deemed always to have had effect as if it also provided for Schedule 1 to those Regulations to have effect, so far as relating to cross-border mergers—
(a)
in relation to mergers relating to the formation of an SE or SCE which take place on or after 18th August 2006, and
(b)
in relation to all other mergers which take place on or after 1st January 2007.
(2)
Regulation 3(3) of those Regulations is deemed always to have had effect as if it also provided for Schedule 3 to those Regulations to have effect, so far as relating to cross-border transfers of business, in relation to transfers which take place on or after 1st January 2007.
5-
Revocation
(1)
The repeal of section 116(8A) and (8B) of TCGA 1992 by paragraph 10 of Schedule 1 to the Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 is deemed never to have had effect.
(2)
Accordingly, that paragraph—
(a)
is revoked, and
(b)
is treated as if it were never included in those Regulations.
6-
Transitional: references to Companies Act 2006
(1)
Until section 658 of the Companies Act 2006(7) (rule against limited company acquiring own shares) comes into force, references to that section in the provisions specified in Schedule 4 (transitional: references to Companies Act 2006) have effect as if they were references to section 143 of the Companies Act 1985(8) (general rule against companies acquiring own shares).
(2)
This regulation, so far as it has effect in relation to any provision specified in that Schedule, has the same effect as that provision has by virtue of regulation 3 of the Corporation Tax (Implementation of the Mergers Directive) Regulations 2007 (as read with regulation 4 of these Regulations).
16th June 2008
Alan Campbell
Claire Ward
Two of the Lords Commissioners of Her Majesty’s
Treasury
SCHEDULE 1
Regulation 3
AMENDMENTS TO TCGA 1992
1.
TCGA 1992 is amended as follows.
2.
In section 116(8A)(9) (reorganisations, conversions and reconstructions) at the end insert—
“This subsection does not apply in relation to a transaction to which paragraph 12G of Schedule 9 to the Finance Act 1996 (c. 8) (exchanges etc: treatment of loan relationships) applies.”.
3.
In section 140F(2)(10) (merger: assets outside UK tax charge)—
(a)
omit “and” at the end of paragraph (d), and
(b)
after paragraph (e) insert—
“and
(f)
in the case of a merger to which subsection (1)(c) or (d) applies, in the course of the merger each transferor ceases to exist without being in liquidation (within the meaning given by section 247 of the Insolvency Act 1986 (c.55)).”.
4.
After section 140G (treatment of securities issued on merger) insert—
140GA.
“Disapplication of sections 24 and 122 where subsidiary merges with its parent
Sections 24 and 122 do not apply if—
(a)
a merger is effected by the transfer by a company (“the transferor company”) of all of its assets and liabilities to a single company that holds the whole of the ordinary share capital in the transferor company,
(b)
each merging company is resident in a member State,
(c)
the merging companies are not all resident in the same State,
(d)
section 139 does not apply in relation to the transfer, and
(e)
in the course of the merger the transferor company ceases to exist without being in liquidation (within the meaning given by section 247 of the Insolvency Act 1986 (c. 55).”.
5.
In section 140I(1)(a)(11) (division of business or transfer of assets) for “to which section 140A(1) or 140A(1A) applies (or to which either of those provisions would apply” substitute “mentioned in section 140A(1) or (1A) (or which would be of such a kind”.
6.
In section 140J(1)(a) (mergers) for “to which section 140E(1) applies” substitute “mentioned in section 140E(1)”.
7.
In section 140L(1) (interpretation) after “140K” insert “and this section”.
