Corporation Tax Act 2009 section 821

European cross-border mergers: introduction

Section 821 sets out the conditions that must be met for a European cross-border merger to qualify for tax-neutral treatment of intangible fixed assets under section 822.

• The merger must involve the formation of a European Company (SE), a European Co-operative Society (SCE), or a transfer of all assets and liabilities to an existing or new company, with consideration typically in the form of shares or debentures.
• Each company involved in the merger must be resident in a relevant state, and the merging companies must not all be resident in the same relevant state — meaning at least one must be in a different jurisdiction.
• Where assets and liabilities are transferred, the consideration must be shares or debentures issued to the transferor's shareholders, unless prevented by rules against a company acquiring its own shares.
• Where a transferor company transfers all its assets and liabilities to an existing or new company, the transferor must cease to exist without going into formal liquidation.