cgta79/s85.- Capital Gains Tax Act 1979 Section 85 Exchange of securities for those in another company.

CHAPTER II

REORGANISATION OF SHARE CAPITAL, CONVERSION OF SECURITIES, ETC.

Company reconstructions and amalgamations

[1965 Sch. VII 6;
1977 s.40(1)]

85. - (1) Subsection (3) below has effect where a company (company A) issues shares or debentures to a person in exchange for shares in or debentures of another company (company B) and -

(a) company A holds, or in consequence of the exchange will hold, more than one quarter of the ordinary share capital (as defined in section [832(1) ¹ ] of the Taxes Act) of company B, or

(b) company A issues the shares or debentures in exchange for shares as the result of a general offer -

(i) which is made to members of company B or any class of them (with or without exceptions for persons connected with company A), and

(ii) which is made in the first instance on a condition such that if it were satisfied company A would have control of company B.

[1965 Sch. VII 7.]

(2) Subsection (3) below also has effect where under section 86 below persons are to be treated as exchanging shares or debentures for shares or debentures held by them in consequence of the arrangement there mentioned.

[1965 Sch. VII 6(1),
7(1); 1966
Sch. X 7(3).]

(3) Subject to the provisions of sections 87 and 88 below, sections 78 to 81 above shall apply with any necessary adaptations as if the two companies mentioned in subsection (1) above, or as the case may be in section 86 below, were the same company and the exchange were a reorganisation of its share capital.

1 1988(T), Sch. 29, para. 32. Originally "526(5)".