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HMRC internal manual

Corporate Intangibles Research and Development Manual

Intangible assets: company reorganisations: transfer of non UK trade between EU companies: meaning of terms

Terms used in CTA09/PART8/S819 and S820

If advice is needed on foreign tax regimes, HMRC staff can obtain this from BAI Business International.

‘Company’ means any entity listed as a company in the Annex to the Mergers Directive.

‘EU company’ is one incorporated under the law of a member State.

‘Securities’ includes shares.

‘Residence in an EU state’ means a company must be within the charge to tax under that state’s law because it is resident for the purpose of the charge (not simply because it has a source of income there) and it must not be treated as resident in a non-member state by virtue of a tax treaty.

Commercial purpose test

There is a provision for companies to seek advance clearance that the last condition inCIRD42060 (the commercial purpose test) is satisfied. The Anti-Avoidance Group (Intelligence), Clearance and Counteraction Team deals with all clearance applications and the procedure is described in CIRD42100.

Where a company submits tax computations on the basis that relief under S819 is available and there is no record of a clearance application, inspectors should send a report and the file to the Anti-Avoidance Group (Intelligence), Clearance and Counteraction Team.

Unlike the equivalent CG tax provision in TCGA92/S140C, there is no requirement that intangible asset taxable credits and deductible debits resulting from the transfer be aggregated before computing the relief available. Instead companies have toclaim on an asset-by-asset basis.