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HMRC internal manual

Company Taxation Manual

HM Revenue & Customs
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Corporation Tax: company purchase schemes: aspects

CTA10/S707, S711, S712 and S717 (formerly ICTA88/S767B)

‘Control’ is to be construed for the purposes of this legislation in accordance with CTA10/S707 (formerly ICTA88/S416, as modified by ICTA88/S767B (5) and (6)).

The arrangements referred to in CTM06510 condition 2 are arrangements to which the person who had control of the company before its change of ownership is a party or is aware of.

CTM06510 condition 3 could be satisfied where the asset transferred consists of only part of the subject company’s trade or business or of one of two trades carried on by the company. However, in practice the legislation is unlikely to be applied unless tax avoidance is in issue.

If the legislation needs to be applied in any case, recovery will be sought from the person (or persons) who previously controlled

  • the subject company, and
  • any company which those persons controlled during the three years before the change in ownership and continue to control,

in priority to any company which they no longer control. Recovery will not be sought from any company they sold before 30 November 1993.