Commentary

D1.769 Loan relationships—European Community cross border mergers and transfers

Corporate tax
Corporate tax | Commentary

D1.769 Loan relationships—European Community cross border mergers and transfers

Corporate tax | Commentary

D1.769 Loan relationships—European Community cross border mergers and transfers

European Community cross border mergers

Application of provisions

Specific provisions1 deal with the transfer of loan relationships on certain cross-border mergers. The provisions apply where a merger is effected by:

  1.  

    •     prior to IP completion day, an SE being formed by the merger of two or more companies in accordance with the relevant EC provisions dealing with SEs (see below)

  2.  

    •     prior to IP completion day, an SCE being formed by the merger of two or more cooperative societies, at least one of which is a society registered under the Co-operative and Community Benefit Societies Act 2014, in accordance with the relevant EC provisions dealing with SCEs (see below)

  3.  

    •     the transfer of one or more companies of all the assets and liabilities to a single existing company or

  4.  

    •     the transfer of two more companies of all their assets and liabilities to a single new company (other than an SCE or an SCE) in exchange for the issue by the transferee, to each person holding shares in or debentures of a transferor, of shares or debentures2

From IP completion day (11pm on 31 December 2020), every SE that is registered in the United Kingdom immediately before that day is automatically converted into a 'UK Societas'. From IP completion day, no new SEs or SCEs can be formed in the UK3.

The equivalent provisions on a merger involving the transfer of intangible assets and derivative contracts are at D1.664 and D1.8103 respectively. The capital

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