Commentary

D2.405 Pre-change assets—Deferral of gain or loss

Corporate tax
Corporate tax | Commentary

D2.405 Pre-change assets—Deferral of gain or loss

Corporate tax | Commentary

D2.405 Pre-change assets—Deferral of gain or loss

Where a pre-change asset is sold, but due to specific relieving provisions, the gain or loss is deferred, it will generally be tracked until it falls to be recognised and then it will be taxed as a gain or loss on a pre-change asset1. The specific deferral reliefs mentioned in the legislation are:

  1.  

    (a)     Where there is a reconstruction involving the transfer of trade or part of a trade in exchange for shares in the new owner2. The new owner will be treated as acquiring pre-change assets3, if the reconstruction is part of an arrangement to secure a tax advantage4

  2.  

    (b)     Where a UK company (A) disposes of an overseas trade to a non-resident company (B) in exchange for shares in B, any capital gain is deferred until either A sells some or all of the shares or until (within six years) B sells assets of the trade5. If the assets of

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