Capital gains—intra-group asset transfers
Capital gains—intra-group asset transfers

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

  • Capital gains—intra-group asset transfers
  • Policy rationale
  • No gain, no loss rule
  • Exceptions
  • Reorganisation rules
  • Disposals outside the group
  • Trading stock
  • Appropriations to trading stock
  • Appropriations from trading stock
  • Intra-group transfers and other taxes

FORTHCOMING CHANGE relating to transfers within an EU group: Finance Bill 2020 is expected to contain provisions permitting companies to pay tax in instalments in relation to disposals of assets to companies resident in an EEA State which would take place on a ‘no gain no loss’ basis if the transferee were UK-resident, either under the reconstruction rule in section 139 of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) or under the intra-group transfer rules in TCGA 1992, s 171. This measure would also apply to intra-group transfers of loan relationships, derivative contracts or intangible fixed assets to another company resident in an EEA State. The new rule is in response to a 2019 decision of the UK First-tier Tribunal, see News Analysis: First-Tier Tribunal relies on freedom of establishment to partially disapply UK rules on tax-free intra-group transfers (Gallaher Limited v HMRC). The provisions will apply retrospectively from 11 July 2019 in relation to accounting periods ending after 9 October 2018.

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