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OA 8: Shareholder continuity requirements for memorandum accounts
or “Rules for keeping company credits when ownership changes”
You could also call this:

“How credits and debits are handled when companies merge”

When a company joins with another company in a special way called a resident’s restricted amalgamation, some special rules apply to their financial records. These rules are about how credits and debits are treated in the new combined company.

If a company that’s joining stops existing, and it had special financial accounts, the credits and debits in those accounts are moved to the new combined company. It’s as if they were always in the new company’s accounts from the day they were first recorded.

After the companies join, when checking if the same shareholders still own the company (which is important for some tax rules), you pretend that the new combined company was actually the old company that stopped existing. You imagine it had the same shareholders and people who could buy shares as the old company did.

There are some rules to stop people from trying to cheat the system. These rules, found in [sections GB 34 and GB 41], still apply to the joining companies, but they might be changed a bit to fit this situation.

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Next up: OA 10: When credits or debits due to amalgamating company but not recorded

or “Credits and debits not yet recorded when companies merge”
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Part O Memorandum accounts
General provisions: General provision

OA 9General treatment of credits and debits on resident’s restricted amalgamation

  1. This section applies—

  2. on a resident’s restricted amalgamation, in relation to an amalgamated company and a memorandum account, if an amalgamating company ends its existence on the amalgamation and, at the time of the amalgamation, the amalgamating company maintains 1 or more memorandum accounts of the type referred to in sections OA 2(1)(a) to (d), and (f); and
    1. for the purposes of determining whether a credit or debit arises in the same type of account of the amalgamated company.

      1. A credit or debit recorded in the memorandum account of the amalgamating company before the date of the amalgamation is treated as if it were recorded in the same type of account of the amalgamated company on the date it was recorded in the amalgamating company’s account with effect from the time of the amalgamation.

      2. For the purposes of section OA 8(7) and (8), in determining at a time after the amalgamation whether continuity of shareholding exists for the credit or debit in the memorandum account, the amalgamated company is treated for all times before the amalgamation as if—

      3. it did not separately exist; and
        1. it were instead the amalgamating company, with the same shareholders and option holders.

          1. For the purposes of determining the credits and debits in the memorandum account of an amalgamating company, sections GB 34 and GB 41 (which relate to arrangements to defeat the application of certain provisions) apply, modified as necessary.

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          Notes
          • Section OA 9(3): amended (with effect on 1 April 2008), on , by section 136 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
          • Section OA 9(4): amended, on (applying for income years beginning on or after that date), by section 86(1) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).