Taxes Consolidation Act 1997 section 638A

Company mergers and divisions

Section 638A deals with the tax implications of company mergers and divisions, ensuring that all tax obligations of a transferor company automatically transfer to the successor company or companies.

• When a merger or division takes place under the Companies Act 2014, the transferor company's tax liabilities, filing obligations, reporting requirements and payment duties all transfer to the successor company.
• The transfer of obligations covers Part 4A (Pillar Two global minimum tax), Part 38 (returns), Part 41A (self-assessment), Part 42 (collection and recovery) and Part 47 (penalties and interest).
• Any appeal already made by the transferor company is treated as an appeal by the successor company, and any right of appeal the transferor held passes to the successor.
• Finance Act 2025 extended the provision to include Pillar Two obligations, backdated to 31 December 2023 to ensure continuity of coverage from the date those rules took effect.