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.