Transport Act 2000 (c. 38)

(The document as of February, 2008)

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(a) hold the property or rights for the transferee's benefit, or

(b) discharge the liabilities on the transferee's behalf.

(4) The transferor is to have all powers necessary for the performance of his duty under sub-paragraph (2), but the transferee must act on the transferor's behalf (so far as possible) in the performance of that duty.

(5) Nothing in sub-paragraphs (2) to (4) affects the law of the United Kingdom (or of any part of the United Kingdom) as it applies to the vesting of the property, rights or liabilities in the transferee by virtue of the transfer scheme.

(6) References in this paragraph to foreign property, rights or liabilities are references to property, rights or liabilities as respects which any issue arising in any proceedings would be determined (in accordance with the rules of private international law) by reference to the law of a country or territory outside the United Kingdom.

(7) The transferee must meet any expenses incurred by the transferor in consequence of this paragraph.

(8) Duties imposed on the transferor or the transferee by this paragraph are enforceable in the same way as if they were imposed by a contract between them.

Certificates

14 (1) This paragraph applies if--

(a) a transfer scheme provides for the transfer of property, rights or liabilities from a transferor to a transferee, and

(b) a certificate falling within sub-paragraph (2) is made jointly by or on behalf of the parties.

(2) A certificate falls within this sub-paragraph if it certifies that any specified property, right or liability--

(a) was intended to be, and was, vested in the transferee by virtue of the transfer, and

(b) has not been the subject of an agreement under paragraph 11.

(3) The certificate is to be conclusive evidence for all purposes of the facts it certifies.

(4) The reference in sub-paragraph (2) to property includes a reference to an interest in or right over property.

(5) Sub-paragraph (6) applies if--

(a) one of the parties requests the other to join in the preparation of a certificate, and

(b) they fail to agree the terms of a certificate within the period of one month starting with the day of the request.

(6) The parties must--

(a) refer the matter to the Secretary of State, and

(b) issue a certificate in such terms as may be specified in a direction given by him.

(7) The parties are the transferor and the transferee.

Restrictions on dealing with land

15 (1) For the purposes of this paragraph a person is a party if--

(a) he is the transferor (or one of the transferors) under a transfer scheme and holds an interest in land immediately after the scheme comes into force, or

(b) he is the transferee (or one of the transferees) under the scheme and an interest in land is transferred to him under the scheme.

(2) For the purposes of this paragraph the relevant land is any land in which any party has an interest immediately after the scheme comes into force.

(3) On the representation of any of the parties the Secretary of State may give to the parties a direction stating that sub-paragraph (4) is to apply to such of the relevant land as the direction specifies.

(4) While the direction remains in force--

(a) no party may dispose of an interest in any of the specified land unless the Secretary of State consents;

(b) if a party proposes to dispose of such an interest and the Secretary of State thinks it necessary or expedient to exercise any of the powers set out in sub-paragraph (5) for the protection of any other party, the Secretary of State may exercise any of those powers.

(5) The powers are--

(a) power to consent to the proposed disposal subject to compliance with such conditions as the Secretary of State may see fit to impose;

(b) power to require a party to dispose of an interest in any of the specified land to such person and in such manner as may be specified in the requirement;

(6) In sub-paragraph (5)(b) and (c) references to an interest include (but are not limited to) references to the interest whose disposal is proposed.

(7) A person who is not a party and who is dealing with a party (or with a person claiming under a party) in relation to land is not to be concerned to see or enquire--

(a) whether this paragraph applies (or has applied) in relation to any of the land;

(b) whether a direction under this paragraph has been given in relation to any of the land;

(c) whether this paragraph or any condition imposed or requirement made under it has been complied with in connection with the dealing or any other dealing concerning any of the land.

(8) No transaction between a person who is not a party (on the one hand) and a party or a person claiming under a party (on the other) is to be invalid by reason of any failure to comply with this paragraph or any condition imposed or requirement made under it.

Construction of agreements etc

16 (1) This paragraph applies if--

(a) a transfer scheme provides for the transfer of property, rights or liabilities from a transferor to a transferee, and

(b) immediately before the coming into force of the scheme the transferor was entitled or subject to the property, rights or liabilities under an agreement to which he was then a party.

(2) This paragraph applies--

(a) whether or not the agreement is in writing;

(b) whether or not the transferor could assign the property, rights or liabilities.

(3) So far as the agreement relates to the property, rights or liabilities transferred to the transferee, as respects anything falling to be done after the coming into force of the scheme the agreement is to have effect as if--

(a) the transferee had been a party to it instead of the transferor;

(b) a reference to the transferor were a reference to the transferee;

(c) a reference to a person employed by (or engaged in the business of) the transferor and holding a specified office or serving in a specified capacity were a reference to such a person as the transferee may appoint or, in default of appointment, to a person with corresponding functions who is employed by (or engaged in the business of) the transferee;

(d) a reference in general terms to persons employed by, persons engaged in the business of, or agents of, the transferor were a reference to persons employed by, persons engaged in the business of, or agents of, the transferee.

(4) A reference mentioned in sub-paragraph (3)(b) or (c) may be express or implied; and if express it is immaterial how it is worded.

(5) It is immaterial how a reference mentioned in sub-paragraph (3)(d) is worded.

17 (1) This paragraph applies if--

(a) a transfer scheme provides for the transfer of property, rights or liabilities from a transferor to a transferee, and

(b) immediately before the coming into force of the scheme any provision of an agreement to which the transferor was not a party, any statutory provision or any provisions of a document (other than an agreement) related to the property, rights or liabilities transferred to the transferee.

(2) This paragraph applies--

(a) whether or not the agreement mentioned in sub-paragraph (1)(b) is in writing;

(b) whether or not the transferor could assign the property, rights or liabilities.

(3) So far as the agreement, provision or document relates to the property, rights or liabilities transferred to the transferee, as respects anything falling to be done after the coming into force of the scheme the agreement, provision or document is to have effect as if--

(a) a reference to the transferor were a reference to the transferee;

(b) a reference to a person employed by (or engaged in the business of) the transferor and holding a specified office or serving in a specified capacity were a reference to such a person as the transferee may appoint or, in default of appointment, to a person with corresponding functions who is employed by (or engaged in the business of) the transferee;

(c) a reference in general terms to persons employed by, persons engaged in the business of, or agents of, the transferor were a reference to persons employed by, persons engaged in the business of, or agents of, the transferee.

(4) A reference mentioned in sub-paragraph (3)(a) or (b) may be express or implied; and if express it is immaterial how it is worded.

(5) It is immaterial how a reference mentioned in sub-paragraph (3)(c) is worded.

(6) A reference mentioned in sub-paragraph (3) to the transferor may be a general reference to a class of persons of which the transferor is one (without the transferor being named).

(7) For the purposes of this paragraph a statutory provision is a provision contained in an Act or in a document made or issued under an Act; and here "Act" includes a private or local Act.

Proceedings etc

18 (1) This paragraph applies if a transfer scheme provides for a transfer from a transferor to a transferee.

(2) From the coming into force of the scheme the transferee is to have the same rights, powers and remedies for ascertaining, perfecting or enforcing a right or liability transferred to him under the scheme as he would have had if the right or liability had at all times been a right or liability of his.

(3) From the coming into force of the scheme any person (other than the transferee) is to have the same rights, powers and remedies for ascertaining, perfecting or enforcing a right or liability transferred to the transferee under the scheme as he would have had if the right or liability had at all times been a right or liability of the transferee.

(4) The rights and powers which the transferee or any other person is to have include--

(a) rights and powers as to the taking or resisting of legal proceedings;

(b) rights and powers as to the making or resisting of applications to an authority.

(5) Sub-paragraph (6) applies if on the coming into force of the scheme legal proceedings or applications to an authority by or against the transferor are pending.

(6) The proceedings or applications must be continued by or against the transferee (to the transferor's exclusion) in so far as they relate--

(a) to any property, rights or liabilities transferred to the transferee under the scheme, or

(b) to any agreement or enactment relating to any such property, rights or liabilities.

Third parties

19 (1) This paragraph applies if--

(a) an agreement is made by the parties under paragraph 5 or 9 or treated as made under paragraph 6 or 10, or

(b) an instrument is executed by the parties under paragraph 9.

(2) The agreement or instrument is to bind all other persons even if it would (apart from this sub-paragraph) have required the consent or concurrence of any other person.

(3) If as a result of the agreement or instrument the rights or liabilities of a person who is not a party become enforceable as to part against or by one party and as to part against or by another party--

(a) the parties must notify that person of the agreement or instrument;

(b) that person may within the period of 28 days (starting with the day he is notified) apply to the Secretary of State to give a direction to vary the agreement or instrument.

(4) If the Secretary of State is satisfied that the agreement or instrument operated unfairly against that person, the Secretary of State may give a direction to the parties requiring them to vary the agreement or instrument in a way specified in the direction.

20 (1) For the purposes of this paragraph--

(a) a party is a person who is a transferor or a transferee under the transfer scheme or schemes referred to in this paragraph;

(b) a third party is a person who is not a transferor or a transferee under the transfer scheme or schemes referred to in this paragraph.

(2) This paragraph applies if--

(a) a transfer scheme is made or transfer schemes are made,

(b) rights or liabilities of a third party are (apart from the scheme or schemes) enforceable against or by a transferor,

(c) in consequence of the scheme or schemes or of anything done under this Schedule the third party's rights or liabilities become enforceable as to different parts against or by different parties, and

(d) the value of any property or interest of the third party is diminished as a result.

(3) Just compensation must be paid to the third party by one or more of these persons--

(a) the parties against or by whom the third party's rights or liabilities become enforceable;

(b) the transferor concerned (if he does not fall within paragraph (a)).

(4) If it appears to the transferor that a person is or may be entitled to compensation the transferor must--

(a) notify the person that he is or may be entitled, and

(b) invite him to make representations to the transferor within the period of 14 days starting with the date the notification is made.

(5) But if the transferor does not know the person's name and address he must instead publish (in a manner he thinks is appropriate) a notice which--

(a) contains information about the property or interest affected, and

(b) invites any person who thinks he is or may be entitled to compensation to make representations to the transferor within the period specified in the notice (which must not be less than 28 days starting with the date of publication of the notice).

(6) A dispute about whether (or how much) compensation is payable under this paragraph, or about who must pay or be paid it, must be referred to and determined by--

(a) an arbitrator appointed by the President of the Royal Institution of Chartered Surveyors (if the proceedings are to be held in England and Wales),

(b) an arbiter appointed by the Chairman of the Royal Institution of Chartered Surveyors in Scotland (if the proceedings are to be held in Scotland), or

21 (1) For the purposes of this paragraph--

(a) a third party is a person who is not a transferor or a transferee under the transfer scheme or schemes referred to in this paragraph;

(b) a transferred item is any property, right, liability, undertaking or part of an undertaking which is the subject of a transfer (or transfers) under the transfer scheme or schemes referred to in this paragraph.

(2) This paragraph applies if a transfer scheme is made (or transfer schemes are made) and there are court proceedings the parties to which are (or include) a third party and either--

(a) the transferor of a transferred item, or

(b) any transferee or transferees of the item.

(3) The third party may apply to the court at any stage in the proceedings on any of these grounds--

(a) that the issues in the proceedings depend on the identification, with regard to the transferred item, of what has been transferred to whom and what (if anything) has been retained and that the identification has not yet been made;

(b) that the issues in the proceedings raise a question of construction on the provisions of this Chapter which would not arise if the transferor of the transferred item and the transferee (or transferees) of it constituted a single person.

(4) If it appears to the court that such a ground is established it may hear and determine the proceedings on the first and second bases set out below.

(5) If the transferor of the transferred item is a party to the proceedings, the first basis is that the transferor represents and is answerable for the transferee (or transferees) of the item.

(6) If there is one transferee of the transferred item and he is a party to the proceedings, the first basis is that the transferee represents and is answerable for the transferor of the item.

(7) If there are two or more transferees of the transferred item and they are parties to the proceedings, the first basis is that the transferees represent and are answerable for the transferor of the item.

(8) If there are two or more transferees of the transferred item and one or more of them (but not both or all of them) are parties to the proceedings, the first basis is that--

(a) the transferee who is a party represents and is answerable for the transferor of the item and for the transferee of it who is not (or the transferees of it who are not) parties, or

(b) the transferees who are parties represent and are answerable for the transferor of the item and for the transferee of it who is not (or the transferees of it who are not) parties.

(9) The second basis is that the transferor of the transferred item and the transferee (or transferees) of it constitute a single person.

(10) If the court determines the proceedings on the first and second bases any judgment or order of the court is to bind both the transferor and the transferee (or transferees) of the transferred item.

22 (1) For the purposes of this paragraph a relevant person is a person who satisfies these conditions--

(a) he is a transferor or transferee under a transfer scheme or transfer schemes, and

(b) he might be prejudiced by paragraph 21 if there were court proceedings in which the scheme or schemes were an issue.

(2) A relevant person must keep each other relevant person informed of any court proceedings in which the scheme or schemes may become an issue.

23 (1) This paragraph applies if a person falling within sub-paragraph (3) (the claimant) claims that--

(a) he has been prejudiced by paragraph 21,

(b) another person or other persons falling within sub-paragraph (3) ought to indemnify him, and

(2) The claimant may refer the matter to the Secretary of State for determination by him; and a determination must be complied with.

(3) A person falls within this sub-paragraph if he is a transferor or a transferee under the scheme or schemes concerned.

General

24 Paragraphs 11 to 18 and 20 apply whether or not property, rights or liabilities are (or are to be) transferred under the scheme or schemes as a constituent of an undertaking (or part of one).

25 (1) Paragraphs 12 to 18 and 20 to 24 have effect as if references to a transfer scheme or schemes included references to--

(a) an agreement or agreements under paragraph 9 or 11;

(b) an instrument or instruments under paragraph 9;

(2) Where paragraph 14 has effect in relation to an agreement under paragraph 11 by virtue of sub-paragraph (1), sub-paragraph (2)(b) of paragraph 14 shall be disregarded.

(3) Paragraph 19 has effect in relation to an agreement under paragraph 11 as it has effect in relation to an agreement made under paragraph 5 or 9.

(4) Where paragraphs 12 to 24 have effect in relation to--

(a) an agreement under paragraph 9 or 11,

(b) an instrument under paragraph 9, or

references to a transferor or a transferee have effect as references to a transferor or a transferee under the agreement or the instrument.

Section 64.

SCHEDULE 7 Transfer schemes: tax

Interpretation

1 In this Schedule--

"the 1988 Act" means the [1988 c. 1.] Income and Corporation Taxes Act 1988;
"the 1990 Act" means the [1990 c. 1.] Capital Allowances Act 1990;
"the 1992 Act" means the [1992 c. 12.] Taxation of Chargeable Gains Act 1992;
"relevant transfer" means a transfer of property, rights or liabilities under a transfer scheme;
"transferee" in relation to a relevant transfer means the person to whom the property, rights or liabilities are transferred;
"transferor" in relation to a relevant transfer means the person from whom the property, rights or liabilities are transferred.

Chargeable gains: general

2 (1) For the purposes of the 1992 Act a disposal constituted by a relevant transfer is to be taken (in relation to the transferee as well as the transferor) to be for a consideration such that no gain or loss accrues to the transferor.

(2) Sub-paragraph (1) has effect subject to the following provisions of this Schedule.

(3) In section 35(3)(d) of the 1992 Act (list of provisions for transfers treated as made without gain or loss) after sub-paragraph (xii) insert--

" (xiii) paragraph 2(1) of Schedule 7 to the Transport Act 2000; " .

(4) Section 171(1) of the 1992 Act (provision in relation to disposal of assets from one member of a group of companies to another member of the group) does not apply if the disposal in question is constituted by a relevant transfer.

(5) Expressions used in this paragraph and in the 1992 Act have the same meanings in this paragraph as in that Act.

Chargeable gains: securities

3 (1) This paragraph applies if--

(a) assets are transferred to a company under a transfer scheme,

(b) in consequence the Secretary of State gives a direction under section 49 above, and

(2) For the purposes of the 1992 Act the person to whom the securities are issued is to be treated as acquiring them for a consideration--

(a) provided by him wholly and exclusively for the securities, and

(b) equal to the market value of the assets transferred to the company under the scheme.

(3) This paragraph applies whether or not the person to whom the securities are issued is the person transferring the assets under the scheme.

(4) Expressions used in this paragraph and in the 1992 Act have the same meanings in this paragraph as in that Act.

4 (1) This paragraph applies if --

(a) the Secretary of State gives a direction under section 57 above requiring the CAA to release a company from liability in respect of debts,

(b) in connection with the direction the Secretary of State gives a direction or directions under section 58 above, and

(2) Sub-paragraph (3) applies if the direction under section 58 requires securities to be issued to one person only or the directions under that section (taken together) require securities to be issued to one person only; and sub-paragraph (4) applies in any other case.

(3) For the purposes of the 1992 Act the person to whom the securities are issued is to be treated as acquiring them for a consideration--

(a) provided by him wholly and exclusively for the securities, and

(b) equal to the amount of the liability affected by the release required by the direction under section 57.

(4) For the purposes of the 1992 Act a person to whom any of the securities are issued is to be treated as acquiring them for a consideration--

(a) provided by him wholly and exclusively for the securities, and

(b) equal to such part as is just and reasonable of the amount of the liability affected by the release required by the direction under section 57.

(5) This paragraph applies whether or not the person to whom the securities are issued, or any person to whom any of the securities are issued, is a person transferring anything under the transfer scheme in connection with which the direction under section 57 is given.

(6) Expressions used in this paragraph and in the 1992 Act have the same meanings in this paragraph as in that Act.

Chargeable gains: value shifting

5 Nothing in this Chapter and nothing done under it is to be regarded as a scheme or arrangement for the purposes of section 30 of the 1992 Act (tax-free benefits).

Chargeable gains: roll-over relief

6 (1) This paragraph applies if--

(a) but for section 154 of the 1992 Act (depreciating assets) a held-over gain would have been carried forward to a depreciating asset,

(b) the asset is the subject of a relevant transfer, and

(2) Section 154 is to have effect as if the gain had accrued to, and the claim for it to be held over had been made by, the transferee and as if the transferor's acquisition of the depreciating asset had been the transferee's acquisition of it.

(3) Expressions used in this paragraph and in section 154 have the same meanings in this paragraph as in that section.

Chargeable gains: restriction of losses

7 (1) If there has been a relevant transfer of an asset section 174(1) of the 1992 Act (which applies section 41 to cases where assets have been acquired without gain or loss) is to have effect as if the asset had been transferred to the transferee, and acquired by him, in relevant circumstances.

(2) This paragraph is not to prejudice paragraph 2.

(3) Expressions used in this paragraph and in section 174(1) of the 1992 Act have the same meanings in this paragraph as in section 174(1).

Chargeable gains: groups

8 (1) Sub-paragraph (2) applies if a company (the degrouped company)--

(a) acquired an asset from another company at any time when both were members of the same group of companies (the old group),

(b) ceases by virtue of a relevant transfer to be a member of the old group, and

(2) Section 179 of the 1992 Act (company ceasing to be member of group) is not to treat the degrouped company as having by virtue of the transfer sold and immediately reacquired the asset.

(3) Sub-paragraph (4) applies if--

(a) sub-paragraph (2) applies to an asset, and

(b) the degrouped company ceases to be a member of the new group.

(4) On the company so ceasing section 179 of the 1992 Act is to have effect as if the degrouped company and the company from which it acquired the asset had been members of the new group at the time of acquisition.

(5) But sub-paragraph (4) does not apply if--

(a) at the time when the degrouped company ceases to be a member of the new group the company from which it acquired the asset also ceases to be a member of the new group,

(b) the companies are associated companies immediately before and immediately after that time, and

(6) Expressions used in this paragraph and in section 179 of the 1992 Act have the same meanings in this paragraph as in that section.

9 (1) Sub-paragraph (3) applies if--

(a) a company (the degrouped company) ceases by virtue of a relevant transfer to be a member of a group of companies (the old group),

(b) it becomes by virtue of the transfer a member of another group of companies (the new group),

(d) the condition in sub-paragraph (2) is satisfied.

(2) The condition is that--

(a) the degrouped company acquired an asset under a relevant transfer at a time falling before it ceases to be a member of the new group, and

(b) at the time of acquisition the degrouped company and the transferor were not members of the new group.

(3) On the degrouped company ceasing to be a member of the new group section 179 of the 1992 Act is to have effect as if the degrouped company and the transferor had been members of the new group at the time of acquisition.

(4) But sub-paragraph (3) does not apply if--

(a) at the time when the degrouped company ceases to be a member of the new group the transferor also ceases to be a member of the new group,

(b) the companies are associated companies immediately before and immediately after that time, and

(5) Paragraph 8(4) and sub-paragraph (3) above may apply on the same occasion; but if paragraph 8(4) applies to an asset on a given occasion sub-paragraph (3) above does not apply to that asset on that occasion.

(6) Expressions used in this paragraph and in section 179 of the 1992 Act have the same meanings in this paragraph as in that section.

10 (1) Sub-paragraph (4) applies if--

(a) a company ceases by virtue of a relevant transfer to be a member of a group of companies (the old group),

(b) it becomes by virtue of the transfer a member of another group of companies (the new group),

(d) the condition in sub-paragraph (3) is satisfied.

(2) A company falls within this sub-paragraph if immediately before it ceases to be a member of the new group it is a subsidiary of--

(a) the company referred to in sub-paragraph (1)(a), or

(b) the principal company of the new group (if that company differs from the company referred to in sub-paragraph (1)(a)).

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