Degrouping charges and elections ― IFAs

By Tolley
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The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Degrouping charges and elections ― IFAs
  • Exemptions
  • Reallocating a degrouping charge
  • Rollover relief

Where a company ceases to be a member of the group, there is a deemed disposal and re-acquisition at market value of any intangible fixed assets owned by the company which were transferred to it by another group member within the six years prior to the date of the company ceasing to be a member of the group.

CTA 2009, s 780

The deemed disposal and re-acquisition is treated as having taken place immediately after the transfer of the relevant asset to the company leaving the group. The gain on the deemed disposal will be adjusted to reflect the difference between the amortisation debits actually taken into account and those which would have been taken into account if the asset had in fact been acquired at market value.

See Example 1.

For more information on the rules applicable to tangible assets, see the Degrouping charges guidance note.

Exemptions

More on Intangible fixed assets: