Q&As

If both sections 29(2) and 30 of the Taxation of Chargeable Gains Act 1992 potentially apply to a transaction, does one take precedence over the other?

read titleRead full title
Published on LexisPSL on 17/05/2019

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • If both sections 29(2) and 30 of the Taxation of Chargeable Gains Act 1992 potentially apply to a transaction, does one take precedence over the other?

The value shifting rules are anti-avoidance provisions. They are similar to the rules applying to depreciatory transactions in that they target the artificial transfer of value out of assets as a result of transactions between connected parties. However, the value shifting rules apply more widely and unlike the depreciatory transaction rules:

  1. do not always require an actual disposal—the rules instead impose a tax charge at the time of the value shifting transaction by deeming the asset to have been disposed

  2. can convert losses into gains and increase gains realised on a disposal (whether actual or deemed), and

  3. are applied at the level of the asset itself—there is, therefore, no need to prove a material reduction in the value of the asset holding company's shares for the rule to be applied

Without these anti-avoidance provisions, it would be possible for value to be shifted (from one asset to another) or extracted in some way without triggering a t

Related documents:

Popular documents