1893.This Chapter gives the rules that apply for derivative contracts in the case of European cross-border mergers if the merging companies are resident in different member States of the European Community.
1894.This section sets out the conditions (which include the different categories of merger) under which the Chapter applies. It is based on paragraphs 30B(1) and (2) and 30H(1) of Schedule 26 to FA 2002.
1895.The source legislation for subsection (5) requires that the transferee is resident in the United Kingdom or within the corporation tax charge in section 11 of ICTA. The subsection says “within the charge to corporation tax” as the result is the same.
1896.See also the paragraph headed “references to Companies Act 2006” in Part 10 of Schedule 2 which provides for the interpretation of references to section 658 of that Act before that section comes into force.
1897.This section gives the meaning of the two terms for the different categories of merger set out in section 682(2). It is based on paragraph 30B(9) of Schedule 26 to FA 2002.
1898.This section provides that debits and credits in respect of derivative contracts transferred under a merger are brought into account as if the transfer had been for a consideration of an amount equal to the carrying value of the contract in the transferor company’s or companies’ accounts. It is based on paragraph 30B(3) of Schedule 26 to FA 2002.
1899.This section provides the rule to apply in place of section 684 if the transferor company uses fair value accounting. It is based on paragraph 30B(4) of Schedule 26 to FA 2002.
1900.This section disapplies the Chapter if the merger is not effected for genuine commercial purposes unless the Commissioners for HMRC are satisfied, following an application, that this Chapter should apply. It is based on paragraph 30B(6), (7) and (8) of Schedule 26 to FA 2002.
1901.Subsections (2) and (3) provide a clearance procedure equivalent to that in the previous Chapter.
1902.This section disapplies the Chapter under certain circumstances if transparent entities are involved in the merger. It is based on paragraphs 30H(1) and (2) and 30I(1) of Schedule 26 to FA 2002.
1903.This section defines some terms used in the Chapter. It is based on paragraphs 30B(9) and 30I of Schedule 26 to FA 2002.