Intangible assets—transfer of UK business to an EU resident company
In certain circumstances, where the whole or part of a UK business is transferred between companies which are resident in the UK or an EU member state, a claim can be made to treat any intangible fixed assets included in the transfer as transferred on a tax neutral basis for UK purposes1. A claim must be made by both transferor and transferee company. The implications here of a tax neutral transfer are the same as for an intra-group transfer (see D1.646)2.
These provisions give effect to the European Union Mergers Directive (No 2009/133/EC) dealing with cross-border business reorganisations.
Some definitions in this legislation refer to EU laws which would not have been relevant after IP completion day3. However, in order to retain legal continuity, the legal position existing immediately before the UK left the EU has been preserved, to a large degree, by taking a snapshot of the EU law that applied in the UK at that point and bringing it within the UK's domestic legal framework as a new category of law — retained EU law4. These rules can then be amended in the UK by regulations where EU law does not operate effectively or function appropriately or sensibly5. For more on retained EU law see A2.202.
A claim can only be made if6:
• the transferor is not a transparent entity for UK tax purposes, eg a partnership (see below for what