Taxes Consolidation Act 1997 section 702

Union or amalgamation of, transfer of engagement between, societies

Section 702 provides that asset transfers between building societies on a union, amalgamation or transfer of engagements are treated as giving rise to neither a chargeable gain nor an allowable loss for corporation tax purposes.

• Applies to unions, amalgamations of two or more building societies, and transfers of engagements from one building society to another.
• A "building society" means a building society within the meaning of the Building Societies Acts 1874 to 1989.
• Where an asset is disposed of by one society to another as part of such a transaction, the acquiring society is treated as having acquired the asset for a consideration that produces neither a gain nor a loss for the disposing society.
• The effect is that the asset transfers on a tax-neutral basis, with the base cost rolling over to the acquiring society.