Part VI Companies, oil, insurance etc.
Chapter I Companies
Transactions within groups
C1C9C13C11C3C17C14C2C10C16C5C7171 Transfers within a group: general provisions.
C15C8C18C4C12C19F111
Where—
a
a company (“company A”) disposes of an asset to another company (“company B”) at a time when both companies are members of the same group, and
b
the conditions in subsection (1A) below are met,
company A and company B are treated for the purposes of corporation tax on chargeable gains as if the asset were acquired by company B for a consideration of such amount as would secure that neither a gain nor a loss would accrue to company A on the disposal.
1A
The conditions referred to in subsection (1)(b) above are—
a
that company A is resident in the United Kingdom at the time of the disposal, or the asset is a chargeable asset in relation to that company immediately before that time, and
b
that company B is resident in the United Kingdom at the time of the disposal, or the asset is a chargeable asset in relation to that company immediately after that time.
For this purpose an asset is a “chargeable asset” in relation to a company at any time if, were the asset to be disposed of by the company at that time, any gain accruing to the company would be a chargeable gain F9chargeable to corporation tax as a result of section 2B(3) or (4).
F51B
If—
a
company A is deemed under section 25(3) to have previously disposed of the asset, but
b
no gain or loss accrued on that deemed disposal as a result of section 25ZA(2),
that deemed disposal is to be ignored in applying subsection (1) of this section in relation to company B.
2
Subsection (1) above shall not apply where the disposal is—
a
a disposal of a debt due from F16company B effected by satisfying the debt or part of it; or
b
a disposal of redeemable shares in a company on the occasion of their redemption; or
F10ba
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
c
a disposal by or to an investment trust; or
F6cd
a disposal by or to a qualifying friendly society; or
da
db
a disposal by company A in fulfilment of its obligations under an option granted to company B at a time when those companies were not members of the same group;
F13e
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
and the reference in subsection (1) above to F17company A disposing of an asset shall not apply to anything which under section 122 is to be treated as a disposal of an interest in shares in a company in consideration for a capital distribution (as defined in that section) from that company, whether or not involving a reduction of capital.
3
F143A
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
For the purposes of subsection (1) above, so far as the consideration for the disposal consists of money or money’s worth by way of compensation for any kind of damage or injury to assets, or for the destruction or dissipation of assets or for anything which depreciates or might depreciate an asset, the disposal shall be treated as being to the person who, whether as an insurer or otherwise, ultimately bears the burden of furnishing that consideration.
F25
In subsection (2)(cd) above “qualifying friendly society” means a company which is a qualifying society for the purposes of F3section 165 of the Finance Act 2012 (incorporated friendly societies entitled to exemption from income tax and corporation tax on certain profits).
F186
Subsection (1) above applies notwithstanding any provision in this Act fixing the amount of the consideration deemed to be received on a disposal or given on an acquisition.
But where it is assumed for any purpose that a member of a group of companies has sold or acquired an asset, it shall be assumed also that it was not a sale or acquisition to which this section applies.