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FO 4: Rights and obligations of amalgamated companies
or “When companies merge, the new company takes on the old company's tax responsibilities and benefits”
You could also call this:

“How tax rules apply when companies merge and have unpaid debts”

When companies join together, it’s called an amalgamation. In this process, one company (called the amalgamated company) takes over the responsibilities of another company (called the amalgamating company).

Some rules about money that companies don’t have to pay back (called remitted amounts) don’t apply just because of this joining process. These rules are in sections CG 2, CG 2C and DB 47.

However, there’s an exception to this. If the company being taken over (the amalgamating company) has certain responsibilities that the new company (the amalgamated company) must take on, then section CG 2C does apply. In this case:

The new company is treated as if it were the original company (company A) for the purposes of this rule. This also applies if the new company later joins with another company. The rule applies from the time the companies join until the responsibilities are taken care of.

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Next up: FO 6: Cancellation of shares

or “How shares are treated when companies merge and cancel existing shares”
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Part F Recharacterisation of certain transactions
Amalgamation of companies

FO 5Amalgamations and remitted liabilities

  1. Sections CG 2, CG 2C (which relate to remitted amounts) and DB 47 (Payments for remitted amounts) do not apply merely because an amalgamated company succeeds to a liability of an amalgamating company on an amalgamation.

  2. Despite subsection (1), when an amalgamating company to which section CG 2C applies has liabilities that are required to be assumed under section FO 4(2)(b), section CG 2C applies—

  3. to the amalgamated company as if it were company A; and
    1. in the same way to the amalgamated company that is an amalgamating company in a subsequent amalgamation; and
      1. from the date of the amalgamation or a subsequent amalgamation to the date on which the liabilities are met.

        Compare
        Notes
        • Section FO 5(1) heading: inserted (with effect on 22 November 2013), on , by section 118(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
        • Section FO 5(1): amended (with effect on 22 November 2013), on , by section 118(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
        • Section FO 5(2) heading: inserted (with effect on 22 November 2014), on , by section 118(3) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
        • Section FO 5(2): inserted (with effect on 22 November 2014), on , by section 118(3) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).