Commentary

D1.646 Transfers of intangible assets within a group

Corporate tax
Corporate tax | Commentary

D1.646 Transfers of intangible assets within a group

Corporate tax | Commentary

D1.646 Transfers of intangible assets within a group

Where an intangible fixed asset is transferred between two companies which are members of the same group, and the asset is a chargeable intangible asset for both companies at the time of the transfer, the transfer is treated as tax neutral1. This provides similar relief to the capital gains provisions see D2.310.

A 'chargeable intangible asset' is broadly one which falls within the computational rules of the corporate intangible regime2 (for detailed definition see D1.635).

Tax neutrality has the following main tax implications3:

  1.  

    •     the transfer is not regarded as a realisation by the transferor nor as an acquisition by the transferee (this means, in particular, that the transferee inherits the transferor's tax cost of the asset), and

  2.  

    •     the transferee inherits the transferor's tax history, and is regarded as if it had itself owned the asset throughout the period it was owned by the transferor; all debits and credits brought into account by the transferor are brought into account by the transferee; this means, in particular, that the transferee's writing down debits are based on the original costs and tax written down values etc of the transferor

  3.  

    •     the asset continues to be treated in the hands of the transferee

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