Finance Bill

House of Commons

Session 2005 - 06
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Finance Bill

Finance Bill
Part 4 — European company statute
49

56
Capital allowances
(1)
After section 561 of CAA 2001 (transfer of UK trade to company in another
member State) insert—
“561A
     Transfer during formation of SE by merger
(1)
This section applies to the transfer of a qualifying asset as part of the
5
process of a merger to which section 140E of TCGA 1992 (formation of
SE by merger) applies (or would apply but for section 140E(1)(d)).
(2)
Where this section applies to a transfer—
(a)
the transfer does not give rise to any allowance or charge under
this Act,
10
(b)
anything done to or by the transferor in relation to assets
transferred is to be treated after the transfer as having been
done to or by the transferee (with any necessary apportionment
of expenditure being made in a reasonable manner), and
(c)
section 343 of ICTA (company reconstruction without change of
15
ownership) shall not apply.
(3)
For the purposes of subsection (1) an asset is a “qualifying asset” if—
(a)
it is transferred to the SE as part of the merger forming it, and
(b)
subsections (4) and (5) are satisfied in respect of it.
(4)
This subsection is satisfied in respect of an asset if—
20
(a)
the transferor is resident in the United Kingdom at the time of
the transfer, or
(b)
the asset is an asset of a permanent establishment in the United
Kingdom of the transferor.
(5)
This subsection is satisfied in respect of an asset if—
25
(a)
the transferee SE is resident in the United Kingdom on
formation, or
(b)
the asset is an asset of a permanent establishment in the United
Kingdom of the transferee SE on its formation.”
(2)
Subsection (1) shall have effect in relation to a transfer made on or after 1st
30
April 2005.
57
Stamp duty reserve tax
(1)
At the end of section 99(4) of FA 1986 (stamp duty reserve tax: interpretation:
chargeable securities) add—

                      “, or
35
(d)
they are issued or raised by an SE (whether or not in the course
of its formation in accordance with Article 2 of Council
Regulation (EC) 2157/2001 on the Statute for a European
Company (Societas Europaea)) and, at the time when it falls to
be determined whether the securities are chargeable securities,
40
the SE has its registered office in the United Kingdom.
(4A)
“Chargeable securities” does not include securities falling within
paragraph (a), (b) or (c) of subsection (3) above if—
(a)
they are securities issued or raised by an SE (whether or not in
the course of its formation in accordance with Article 2 of
45

Finance Bill
Part 4 — European company statute
50

Council Regulation (EC) 2157/2001 on the Statute for a
European Company (Societas Europaea)), and
(b)
at the time when it falls to be determined whether the securities
are chargeable securities, the SE has its registered office outside
the United Kingdom;”.
5
(2)
Subsection (1) shall have effect for the purposes of determining, in relation to
anything occurring on or after 1st April 2005, whether securities (whenever
issued or raised) are chargeable securities for the purposes of Part IV of FA
1986.
58
Bearer instruments: stamp duty and stamp duty reserve tax
10
(1)
In section 90(3C)(a) of FA 1986 (stamp duty reserve tax: bearer instruments)
after “United Kingdom” insert “(other than an SE which has its registered office
outside the United Kingdom following a transfer in accordance with Article 8
of Council Regulation (EC) 2157/2001 on the Statute for a European Company
(Societas Europaea))”.
15
(2)
In section 90(3E)(a) of FA 1986 (stamp duty reserve tax: bearer instruments)
after “United Kingdom” insert “(other than an SE which has its registered office
outside the United Kingdom following a transfer in accordance with Article 8
of Council Regulation (EC) 2157/2001 on the Statute for a European Company
(Societas Europaea))”.
20
(3)
In paragraph 11 of Schedule 15 to FA 1999 (bearer instruments) for the
definition of “UK company” substitute—
““UK company” means—
(a)
a company that is formed or established in the United
Kingdom (other than an SE which has its registered
25
office outside the United Kingdom following a transfer
in accordance with Article 8 of Council Regulation (EC)
2157/2001 on the Statute for a European Company
(Societas Europaea)), or
(b)
an SE which has its registered office in the United
30
Kingdom following a transfer in accordance with Article
8 of that Regulation; ”.
(4)
This section shall have effect for the purposes of determining whether or not
stamp duty or stamp duty reserve tax is chargeable in respect of anything done
on or after 1st April 2005.
35
59
Consequential amendments
(1)
In section 815A(1) of ICTA (transfer of a non-UK trade) after “section 140C”
insert “or 140F”.
(2)
In section 35(3)(d)(i) of TCGA 1992 (re-basing to 1982, &c.) after “140A,” insert
“140E,”.
40
(3)
In section 140A of TCGA 1992 (transfer of UK trade)—
(a)
in subsection (1)(b) for “securities” substitute “shares or debentures”,
and
(b)
in subsection (7) omit the definition of “securities”.
(4)
In section 140C of TCGA 1992 (transfer of non-UK trade)—
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Finance Bill
Part 4 — European company statute
51

(a)
in subsection (1)(c) for “securities” substitute “shares or debentures”,
and
(b)
in subsection (9) omit the definition of “securities”.
(5)
In paragraph 88(1) and (5) of Schedule 29 to FA 2002 (intangible fixed assets:
gains and losses: transferred assets: application for clearance) after “85(5),”
5
insert “85A(5), 87A(6),”.
(6)
In paragraph 127 of that Schedule (acquired assets to be treated as existing
assets) after sub-paragraph (1)(b)(ii) insert—

                                         “, or

                                         (iii) section 140E of that Act (transfer on formation of
10
                                                 SE by merger),”.
(7)
Subsections (3) and (4) shall have effect in relation to an issue effected on or
after 1st April 2005.
60
Residence
(1)
After section 66 of FA 1988 (company residence) insert—
15
“66A
Residence of SE
(1)
This section applies to an SE which transfers its registered office to the
United Kingdom (in accordance with Article 8 of Council Regulation
(EC) 2157/2001 on the Statute for a European Company (Societas
Europaea)).
20
(2)
Upon registration in the United Kingdom the SE shall be regarded for
the purposes of the Taxes Acts as resident in the United Kingdom; and
accordingly, if a different place of residence is given by any rule of law,
that place shall not be taken into account for those purposes.
(3)
The SE shall not cease to be regarded as resident in the United Kingdom
25
by reason only of the subsequent transfer from the United Kingdom of
its registered office.
(4)
In this section “the Taxes Acts” has the same meaning as in the Taxes
Management Act 1970.”
(2)
In section 249(3) of FA 1994 (certain companies to be treated as non-resident)
30
after “resident there)” insert “, by virtue of section 66A of that Act (residence of
SE)”.
(3)
Subsection (1) shall have effect in relation to the transfer of a registered office
which occurs on or after 1st April 2005.
61
Continuity for transitional purposes
35
(1)
If at any time a company ceases to be resident in the United Kingdom in the
course of the formation of an SE by merger (whether or not the company
continues to exist after the formation of the SE) the provision specified in
subsection (3) shall apply after that time, but in relation to liabilities accruing
and matters arising before that time—
40
(a)
as if the company were still resident in the United Kingdom, and
(b)
where the company has ceased to exist, as if the SE were the company.

Finance Bill
Part 4 — European company statute
52

(2)
If at any time an SE transfers its registered office from the United Kingdom and
ceases to be resident in the United Kingdom, the provision specified in
subsection (3) shall apply after that time, but in relation to liabilities accruing
and matters arising before that time, as if the SE were still resident in the
United Kingdom.
5
(3)
The provision mentioned in subsections (1) and (2) is Schedule 18 to FA 1998
(tax returns, assessments, &c.).
62
Groups
(1)
After section 170(10) of TCGA 1992 (groups: merger, &c.) insert—
“(10A)
Where the principal company of a group (Group 1)—
10
(a)
becomes an SE by reason of being the acquiring company in the
formation of an SE by merger by acquisition (in accordance with
Articles 2(1), 17(2)(a) and 29(1) of Council Regulation (EC)
2157/2001 on the Statute for a European Company (Societas
Europaea)),
15
(b)
becomes a subsidiary of a holding SE (formed in accordance
with Article 2(2) of that Regulation), or
(c)
is transformed into an SE (in accordance with Article 2(4) of that
Regulation),

Group 1 and any group of which the SE is a member on formation shall
20
be regarded as the same; and the question whether or not a company
has ceased to be a member of a group shall be determined accordingly.”
(2)
Subsection (1) shall have effect in relation to the formation of an SE (including
its formation by transformation) which occurs on or after 1st April 2005.
63
Groups: intangible fixed assets
25
(1)
After paragraph 51 of Schedule 29 to the FA 2002 (groups: continuity) insert—
“51A
For the purposes of this Schedule where the principal company of a
group (Group 1)—
(a)
becomes an SE by reason of being the acquiring company in
the formation of an SE by merger by acquisition (in
30
accordance with Articles 2(1), 17(2)(a) and 29(1) of Council
Regulation (EC) 2157/2001 on the Statute for a European
Company (Societas Europaea)),
(b)
becomes a subsidiary of a holding SE (formed in accordance
with Article 2(2) of that Regulation), or
35
(c)
is transformed into an SE (in accordance with Article 2(4) of
that Regulation),

Group 1 and any group of which the SE is a member on formation
shall be regarded as the same; and the question whether or not a
company has ceased to be a member of a group shall be determined
40
accordingly.”
(2)
Subsection (1) shall have effect in relation to the formation of an SE (including
its formation by transformation) which occurs on or after 1st April 2005.