Section 273 | Transfers within a group.

(1)Notwithstanding any provision in the Capital Gains Tax Act 1979 fixing the amount of the consideration deemed to be received on a disposal or given on an acquisition, where a member of a group of companies disposes of an asset to another member of the group, both members shall, except as provided by subsections (2) and (3) below, be treated, so far as relates to corporation tax on chargeable gains, as if the asset required by the member to whom the disposal is made were acquired for a consideration of such amount as would secure that on the other’s disposal neither a gain nor a loss would accrue to that other; but where it is assumed for any purpose that a member of a group of companies has sold or acquired an asset, it shall be assumed also that it was not a sale to or acquisition from another member of the group.^F1

(2)Subsection (1) above shall not apply where the disposal is—^F2

(a)a disposal of a debt due from a member of a group of companies effected by satisfying the debt or part of it; or

(b)a disposal of redeemable shares in a company on the occasion of their redemption; or^F3

(c)a disposal by or to an investment trust within the meaning of section 842 of the Taxes Act 1988;or^F3F4F5

(d)a disposal to a dual resident investing company, within the meaning of section 404 of the Taxes Act 1988or^F5F4F6

(e)a disposal to a company which, though resident in the United Kingdom,—^F6

(i)is regarded for the purposes of any double taxation arrangements having effect by virtue of section 788 of the Taxes Act 1988 as resident in a territory outside the United Kingdom, and^F6

(ii)by virtue of the arrangements would not be liable in the United Kingdom to tax on a gain arising on a disposal of the asset occurring immediately after its acquisition.^F6

and the reference in that subsection to a member of a group of companies disposing of an asset shall not apply to anything which under section 72 of the Capital Gains Tax Act 1979 is to be treated as a disposal of an interest in shares in a company in consideration for a capital distribution (as defined in that section) from that company, whether or not involving a reduction of capital.

(2A)Subsection (1) above shall not apply to a transaction treated by virtue of sections 78 and 85 of the Capital Gains Tax Act 1979 as not involving a disposal by the company first mentioned in that subsection.^F7

(3)For the purposes of subsection (1) above, so far as the consideration for the disposal consists of money or money’s worth by way of compensation for any kind of damage or injury to assets, or for the destruction or dissipation of assets or for anything which depreciates or might depreciate an asset, the disposal shall be treated as being to the person who, whether as an insurer or otherwise, ultimately bears the burden of furnishing that consideration.