Taxes Consolidation Act 1997 section 635

Avoidance of tax

Section 635 provides an anti-avoidance rule which restricts the mergers reliefs available under sections 631 to 634 to transactions carried out for genuine commercial reasons.

• The reliefs provided by sections 631, 632, 633, 633A, 633C and 634 in respect of transfers, disposals or mergers involving an SE or SCE do not apply automatically.
• Relief is only available where it is shown that the transaction was effected for bona fide commercial reasons.
• Relief is denied where the transaction forms part of any arrangement or scheme of which a main purpose is the avoidance of income tax, corporation tax or capital gains tax.
• This section overrides any other provision of the Tax Acts or the Capital Gains Tax Acts that might otherwise allow the relief.