Regulation 114 Disposal of assets in exchange for share or loan capital in a companyI1

Subject to paragraph (3), in the case of non-monetary consideration received in respect of a disposal to a company of an interest in a relevant asset, the amount falling to be set aside under section 61(4) in respect of the consideration shall be nil where the consideration consists of the issue of share capital or loan capital in the company.

For the purposes of paragraph (1), an asset is a relevant asset if it is not a house, dwelling or other property of the authority to which section 74(1) (duty to keep Housing Revenue Account) applied immediately before the disposal, and if, at the time of disposal, expenditure on the acquisition of the asset would be expenditure for capital purposes.

Paragraph (1) shall not apply where the company from which the non-monetary consideration is received is a regulated company within the meaning given to that expression in article 1(4) of the Local Authorities (Companies) Order 1995^f1, and the authority and the company are members of the same local authority group.