MTT44020 - Particular entities and adjustments: Restructures: Transfer of controlling interest treated as acquisition of assets and liabilities
In some cases, the acquisition or disposal of a controlling interest in a member is to be treated as an acquisition or disposal of the assets and liabilities of the member, in accordance with section 209 of Finance (No.2) Act 2023.
Where the treatment applies, any gain or loss made in relation to the transfer is treated as a gain or loss on the disposal of the assets or liabilities of the member, and is to be included in the adjusted profits of that member.
The guidance in MTT44010 will not apply to the member in this case.
This treatment applies where:
- the acquisition or disposal of the controlling interest is treated in the same, or a similar manner, as a transfer of the member’s assets and liabilities by:
- the territory in which the assets are located, where the member is tax transparent under the law of the territory in which it was created, or
- the territory in which the member is located, in any other case, and
- that territory imposes a covered tax (see MTT25100) on the seller based on the difference between:
- the tax basis, and either:
- the consideration paid in exchange for the controlling interest, or
- the fair value of the assets and liabilities.