Taxes Consolidation Act 1997 section 615

Company reconstruction or amalgamation: transfer of assets

Section 615 defers corporation tax on chargeable gains where assets are transferred as part of a scheme of reconstruction or amalgamation.

• Where a company transfers the whole or part of its business to another company on a reconstruction or amalgamation and receives no consideration other than the takeover of liabilities, the transfer is treated as made at no gain/no loss and the transferee inherits the transferor's acquisition cost and date.
• Both the transferor and the transferee must be resident for tax purposes in an EU or EEA Member State or in the United Kingdom, and the assets must remain within the charge to corporation tax on chargeable gains.
• The relief does not apply to trading stock, and may be disapplied by joint election in the case of specified intangible assets, in which case the transfer is treated as made at market value.
• The relief is available only where the reconstruction or amalgamation is carried out for bona fide commercial reasons and does not form part of a tax avoidance arrangement.