Part 6U.K.Venture capital trusts

Chapter 6U.K.Supplementary and general

Acquisitions for restructuring purposesU.K.

326Restructuring to which section 327 appliesU.K.

(1)[F1Sections 326A and 327 apply] if—

(a)arrangements are made for a company (“the new company”) to acquire all the shares (“old shares”) in another company (“the old company”),

(b)the acquisition provided for by the arrangements falls within subsection (2), and

(c)the Commissioners for Her Majesty's Revenue and Customs have, before any exchange of shares takes place under the arrangements, given an approval notification.

(2)An acquisition of shares falls within this subsection if—

(a)the consideration for the old shares consists wholly of the issue of shares (“new shares”) in the new company,

(b)new shares are issued in consideration of old shares only at times when there are no issued shares in the new company other than subscriber shares and new shares previously issued in consideration of old shares,

(c)the consideration for new shares of each description consists wholly of old shares of the corresponding description, and

(d)new shares of each description are issued to the holders of old shares of the corresponding description in respect of, and in proportion to, their holdings.

(3)For the purposes of subsection (1)(c) an approval notification is one which, on the application of either the old company or the new company, is given to the applicant company and states that the Commissioners for Her Majesty's Revenue and Customs are satisfied that the exchange of shares under the arrangements—

(a)will be effected for genuine commercial reasons, and

(b)will not form part of any such scheme or arrangements as are mentioned in section 137(1) of TCGA 1992 (schemes with avoidance purposes).

(4)[F2Nothing in section 326A treats any of the requirements of Chapter 3 as being met, and nothing in section 327 treats any of the requirement of Chapter 4 as being met] in relation to any new shares unless the matching old shares were first issued to the company holding them and have been held by that company from the time when they were issued until they are acquired by the new company.

(5)If, at any time after the arrangements first came into existence and before the new company acquired all the old shares, the arrangements—

(a)cease to be arrangements for the acquisition of all the old shares by the new company, or

(b)cease to be arrangements for an acquisition falling within subsection (2),

section [F3326A does not treat any requirement of Chapter 3 as being met and section] 327 does not treat any requirement of Chapter 4 as being met, and subsection (8) of that section does not apply, in the case of any new shares at any time after the arrangements have so ceased.

Textual Amendments