CTM06790 | Corporation Tax: loss buying: assets transferred between companies: transfer of asset or gain

CTA10/S676BA and S676DA

Profits relating to a transfer of an asset or gain will fall under the restrictions at CTA10/PART14/CHAPTER2B or CHAPTER2D in one of three possible sets of circumstances.

No gain/no loss transfer

This applies where

• there has been a change in ownership of a company,

• following the change in ownership, an asset is transferred to the company on a no gain/no loss basis under TCGA92/S171 (CG45300), and

• the company realises a chargeable gain on that asset within the five years following the change in ownership.

Tax-neutral transfer

This applies where

• there has been a change in ownership of the company,

• following the change in ownership, an intangible fixed asset is transferred to the company on a tax-neutral basis under CTA09/S775 (CIRD40200), and

• the company realises a non-trading chargeable realisation gain on that asset within the five years following the change in ownership.

For these purposes, a non-trading chargeable realisation gain is a chargeable realisation gain which is a non-trading credit for the purposes of CTA09/PART8.

Transfer of gain

This applies where

• there has been a change in ownership of the company, and

• within five years of the change in ownership, a chargeable gain or part of a gain is treated as accruing to the company due to an election under TCGA92/S171A (CG45355).