Taxes Consolidation Act 1997 section 633C

Treatment of securities on a merger

Section 633C provides that where an SE or SCE is formed by a cross-border merger, the merger is treated as a scheme of reconstruction so that shareholders can obtain share-for-share relief.

• The section applies where an SE or SCE is formed by merger, each merging company is tax resident in an EU Member State, and the companies are not all resident in the same Member State.
• The section only applies where the merger does not already qualify as a scheme of reconstruction or amalgamation within the meaning of section 587.
• Where the section applies, the merger is treated as a scheme of reconstruction for the purposes of section 587, so that shareholders who surrender shares in one company for shares in another obtain share-for-share relief.
• The effect is that no disposal of the old shares is treated as having taken place, and the old and new shares are treated as a single asset.