CTM06795 | Corporation Tax: loss buying: assets transferred between companies: assets treated as transferred

CTA10/S676BA and S676DA

Under CTA10/PART14/CHAPTER2B and CHAPTER2D, an asset Q is treated as if it were the same as another asset P if

• asset P was transferred to the company in one of the situations covered by CTA10/CHAPTER2B and CHAPTER2D, and

• asset Q derives its value wholly or partly from asset P.

This means that if the company realises a gain on disposal of asset Q, the disposal may be subject to the restrictions in CTA10/CHAPTER2B and CHAPTER2D. It does not matter that asset Q was not itself transferred to the company because asset Q's value is derived from asset P.

The legislation specifies that this will apply in particular if

• asset Q is a freehold,

• asset P was a leasehold, and

• the company, as lessee, has acquired the reversion.