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HMRC internal manual

Capital Gains Manual

ETMD: general definitions applicable to sections 140A -K

TCGA 1992 Section 140L(1) provides statutory interpretations of various terms which are used in sections 140A - K.

Mergers Directive: means Council Directive 2009/133/EEC of 19 October 2009.

Company: means an entity listed as a company in the annex to the Mergers Directive (ETMD).

Transparent entity: means an entity which is resident in a member state other than the UK and is listed as a company in the annex to the mergers directive, but

  • does not have ordinary share capital (within the meaning given by ICTA section 832, and
  • if it were resident in the UK would not be capable of being a company within the meaning given by the Companies Act 2006.

Section 140L(2) provides that for the purposes of section 140L(1) and sections 140A - K a company is resident in a member state if

  • it is within the charge to tax under the law of that state as being resident for that purpose; and
  • it is not regarded for the purpose of any double taxation relief arrangements to which the State is a party, as resident in a territory not within a member state.