C5C1C2Part 7Derivative contracts

Annotations:
Modifications etc. (not altering text)
C5

Pt. 7 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)

C1

Pt. 7 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)

C2

Pt. 7 modified by 2007 c. 3, s. 809FZZ(8) (as inserted (with effect in accordance with s. 37(4) of the amending Act) by Finance Act 2016 (c. 24), s. 37(2))

Chapter 5Continuity of treatment on transfers within groups

Transferee leaving group after replacing transferor as party to derivative contract

630Introduction to sections 631 and 632

1

Sections 631 and 632 apply if—

a

section 625 (group member replacing another as party to derivative contract) applies because of a transaction or series of transactions within section 626(2) or (3), and

b

before the end of the relevant 6 year period and while still a party to the relevant derivative contract, the transferee ceases to be a member of the relevant group.

2

But the transferee is not to be treated for the purposes of this section and sections 631 and 632 as having left the relevant group if—

a

rights and liabilities under a derivative contract are transferred in the course of a transfer or merger in relation to which Chapter 9 (European cross-border transfers of business) or Chapter 10 (European cross-border mergers) applies, and

b

the transferee ceases to be a member of the relevant group in consequence of the transfer or merger.

3

In a case where subsection (2) applies, if the transferee becomes a member of another group in consequence of the transfer or merger, it is to be treated for the purposes of this section and sections 631 and 632 as if the relevant group and the other group were the same.

4

In this section and sections 631 and 632—

  • “the relevant 6 year period” means the period of 6 years following—

    1. a

      in a case where section 625 applies because of a transaction within section 626(2) (“case A”), that transaction, or

    2. b

      in a case where section 625 applies because of a series of transactions within section 626(3) (“case B”), the last transaction of that series,

  • “the relevant derivative contract” means the derivative contract mentioned in section 625(1),

  • “the relevant group” means—

    1. a

      in case A, the group mentioned in section 626(2),

    2. b

      in case B, the group mentioned in section 626(3), and

  • “the transferee” has the same meaning as in section 625.

C3C4631Transferee leaving group otherwise than because of exempt distribution

1

This section applies if—

a

the transferee ceases to be a member of the relevant group, and

b

it does not so cease just because of a distribution which is exempt F2as a result of section 1075 of CTA 2010 (exempt distributions).

2

F7... This Part applies as if—

a

the transferee had assigned its rights and liabilities under the relevant derivative contract immediately before so ceasing,

b

the assignment had been for consideration of an amount equal to their fair value at that time, and

c

the transferee had immediately reacquired them for consideration of the same amount.

F13

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F14

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

632Transferee leaving group because of exempt distribution

1

This section applies if—

a

the transferee ceases to be a member of the relevant group just because of a distribution which is exempt F3as a result of section 1075 of CTA 2010 (exempt distributions), and

b

there is a chargeable payment within the meaning of F5section 1088(1) of CTA 2010 (chargeable payments connected with exempt distributions) within 5 years after the making of the distribution.

2

F4... This Part applies as if—

a

the transferee had assigned its rights and liabilities under the relevant derivative contract immediately before that chargeable payment was made,

b

the assignment had been for consideration of an amount equal to their fair value immediately before the transferee ceased to be a member of the relevant group, and

c

the transferee had immediately reacquired them for consideration of the same amount.

F63

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F64

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .