Capital gains—intra-group asset transfers

The following Tax practice note provides comprehensive and up to date legal information covering:

  • Capital gains—intra-group asset transfers
  • Policy rationale
  • No gain, no loss rule
  • Transfers within the EEA
  • Exceptions
  • No acquisition
  • Entities with special tax regimes
  • Dual resident investing companies
  • Insurance companies
  • Options
  • More...

Capital gains—intra-group asset transfers

Companies which form a group for capital gains purposes are able to transfer assets to one another free of corporation tax on chargeable gains.

Each company is a separate legal person for tax purposes meaning that, in the absence of a special rule, an intra-group transfer of a capital asset between companies would be a disposal and would trigger chargeable capital gains (or allowable losses).

Acquisitions and disposals taking place between connected persons (a term which includes companies in the same tax group) are normally treated as taking place otherwise than at arm's length with the result that, without the grouping rules, the consideration for the transaction would be deemed to be equal to the market value of the asset transferred irrespective of any actual consideration paid (see Practice Note: Capital gains for connected persons).

Special provisions are also included in various other areas of tax law (eg in particular, stamp taxes) to ensure that intra-group transfers of assets do not trigger any tax costs.

This Practice Note is about the intra-group transfer rules applying to corporation tax on chargeable gains. Practitioners will also need to consider whether an intra-group transfer may trigger a charge to any other type of tax. For a list of the other taxes that may be relevant, with links to the Practice Notes covering each of these topics, see below.


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