Group gains

Produced by Tolley

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

  • Group gains
  • Implications for companies in a gains group
  • Definition of group for capital gains purposes
  • Illustration of capital gains group definition
  • Transfers of assets between group members
  • Degrouping charges
  • Election for deemed intra-group transfer
  • Group-wide rollover relief

Group gains

Implications for companies in a gains group

The main implications of companies being grouped for capital gains purposes are:

  1. transfers between group members are at no-gain / no-loss

  2. degrouping charges may arise where there has been a previous no-gain / no-loss transfer and the transferee company leaves the group within six years

  3. groups can elect for assets to be deemed to have been transferred on a no-gain / no-loss basis

  4. rollover relief may be applied on a group-wide basis

There are similar rules relating to intangible fixed assets. There are also exemptions from both stamp duty and stamp duty land tax for transfers between group companies. Both of these sets of rules include provisions to claw back relief in certain circumstances.

Please note that changes were made to the corporate gains rules for groups of companies by Finance Act 2011 with effect from 19 July 2011. The measures introduced mainly aimed to simplify the tax treatment of chargeable gains for corporate groups, with changes to degrouping charges, SSE and the repeal of certain measures which were considered to be redundant.

See the Degrouping charges and How does SSE interact with other legislation? guidance notes for details of how the rules differ before and after 19 July 2011.

An overview of the regime is provided in the Group capital gains (A) video, which includes a discussion of the key definitions, intra-group transfers, corporate capital losses and transfers of trading stock within a group. Examples are also used to explain these concepts.

Definition of group

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