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Treatment of deduction under section 37O of Act (Deduction for acquisition of shares of companies) to which amalgamating company which has ceased to exist is entitled

Income Tax (Amalgamation of Companies) Regulations 2011

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—(1) Subject to paragraph (3), where —(a)an amalgamating company ceases to exist upon the amalgamation in a basis period relating to any year of assessment; (b)if not for the amalgamation, the amalgamating company would have been entitled in any subsequent year of assessment to any deduction under section 37O of the Act in relation to any qualifying acquisition in section 37O(4) or (4A)(c) or (d) of the Act of ordinary shares in another company; and(c)the shares are transferred to the amalgamated company pursuant to the amalgamation, then section 37O of the Act shall apply as if the amalgamated company were the amalgamating company, for the purpose of allowing the deduction under sub‑paragraph (b) to the amalgamated company.(1A) Subject to paragraphs (1B) and (3), where —(a)an amalgamating company (X) ceases to exist upon the amalgamation in a basis period relating to any year of assessment;(b)if not for the amalgamation, X would have been entitled in any subsequent year of assessment to any deduction under section 37O of the Act in relation to any qualifying acquisition in section 37O(4A)(a) or (b) of the Act of ordinary shares in another company if X had continued to exist and the conditions subsequent for the deduction were satisfied; and(c)the shares are transferred to the amalgamated company (Y) pursuant to the amalgamation,then section 37O of the Act applies as if Y were X, for the purpose of allowing the deduction under sub‑paragraph (b) to Y.(1B) Paragraph (1A) only applies if the conditions in regulation 5A(1)(a) and (b) of the Income Tax (Deduction for Acquisition of Shares of Companies) Regulations 2012 (G.N. No. S 584/2012) (called in these Regulations the Share Acquisition Regulations) are satisfied in accordance with paragraphs (1C) and (1D), respectively.(1C) The condition in regulation 5A(1)(a) of the Share Acquisition Regulations must be satisfied in the following manner:(a)if the subsequent year of assessment is the year of assessment immediately after the year of assessment of the basis period in which the date of amalgamation falls —(i)the condition is satisfied in relation to X throughout the part of the basis period for the year of assessment of the basis period in which the date of amalgamation falls between the date of the acquisition or the first day of the basis period (as the case may be), and the date immediately before the date of amalgamation; and(ii)the condition is satisfied in relation to Y (as if it were X) throughout the period between the date of amalgamation and the end of the basis period for that subsequent year of assessment;(b)if the subsequent year of assessment is any other year of assessment, the condition is satisfied in relation to Y throughout the basis period for that year of assessment.(1D) The condition in regulation 5A(1)(b) of the Share Acquisition Regulations must be satisfied in the following manner:(a)if the subsequent year of assessment is the year of assessment immediately after the year of assessment of the basis period in which the date of amalgamation falls and the condition has been satisfied in accordance with regulation 5A(4) of the Share Acquisition Regulations before that date —(i)the condition remains satisfied in relation to X between the date it is satisfied and the date immediately before the date of amalgamation; and(ii)the condition is satisfied in relation to Y (as if it were X) throughout the period between the date of amalgamation and the end of the basis period for that subsequent year of assessment;(b)if the subsequent year of assessment is the year of assessment immediately after the year of assessment of the basis period in which the date of amalgamation falls and the condition has not been satisfied in accordance with regulation 5A(4) of the Share Acquisition Regulations before that date — the condition is satisfied in relation to Y (as if it were X) in accordance with regulation 5A(4) of the Share Acquisition Regulations, and remains satisfied throughout the period between the date it is satisfied and the end of the basis period in which that date falls;(c)if the subsequent year of assessment is any other year of assessment — the condition is satisfied in relation to Y (as if it were X) throughout the basis period for that year of assessment, or the rest of the basis period in which the condition is satisfied, as the case may be.(1E) Regulation 5A(6) of the Share Acquisition Regulations applies, with the necessary modifications, for the purposes of determining under paragraph (1D) whether regulation 5A(1)(b) of those Regulations is satisfied in relation to X or Y.(2) Subject to paragraph (3), where —(a)an amalgamating company ceases to exist upon the amalgamation in a basis period relating to any year of assessment;(b)if not for the amalgamation, the amalgamating company would have been entitled in any subsequent year of assessment to any deduction under section 37O of the Act in relation to any qualifying acquisition in section 37O(4) or (4A)(c) or (d) of the Act of ordinary shares in another company; and(c)that other company is the amalgamated company,then section 37O of the Act shall apply as if the amalgamated company were the amalgamating company and with all other necessary modifications, for the purpose of allowing the deduction under sub‑paragraph (b) to the amalgamated company.(2A) Subject to paragraphs (2B) and (3), where —(a)an amalgamating company (V) ceases to exist upon the amalgamation in a basis period relating to any year of assessment;(b)if not for the amalgamation, V would have been entitled in any subsequent year of assessment to any deduction under section 37O of the Act in relation to any qualifying acquisition in section 37O(4A)(a) or (b) of the Act of ordinary shares in another company (W) if V had continued to exist and the conditions subsequent for the deduction were satisfied; and(c)W is the amalgamated company,then section 37O of the Act applies as if W were V and with all other necessary modifications, for the purpose of allowing the deduction under sub‑paragraph (b) to W.(2B) For the purpose of paragraph (2A), the conditions in regulation 5A(1)(a) and (b) of the Share Acquisition Regulations must be satisfied in accordance with regulation 5(4) of those Regulations and up to the date immediately before the date of the amalgamation, but not thereafter.(3) Paragraphs (1), (1A), (2) and (2A) apply only if the Comptroller is satisfied that —(a)the shareholders of the amalgamated company on the date of amalgamation are substantially the same as the shareholders of the amalgamating company on the date of the qualifying acquisition of shares in the target company for which the deduction is allowed, unless the Minister or such person as he may appoint has waived this requirement for the case in question and all conditions imposed by the Minister or the person have been satisfied;(b)the shareholders of the amalgamated company on the first day of the year of assessment in which the deduction is to be allowed to it are substantially the same as its shareholders on the date of amalgamation; and(c)on the date of amalgamation, the amalgamated company carries on the same trade or business as that carried on by the amalgamating company immediately before that date.

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