Section 173 | Transfers within a group: trading stock. ^F1

(1)Where—^F1

(a)a company (“company A”) acquires an asset as trading stock of a trade to which this section applies,^F1

(b)the acquisition is from a company (“company B”) that at the time of the acquisition is a member of the same group of companies, and^F1

(c)the asset did not form part of the trading stock of any such trade carried on by company B,^F1

company A is treated for the purposes of section 161 as having acquired the asset otherwise than as trading stock and immediately appropriated it for the purposes of the trade as trading stock.

(2)Where—^F1

(a)a company (“company C”) disposes of an asset forming part of the trading stock of a trade to which this section applies carried on by that company,^F1

(b)the disposal is to another company (“company D”) that at the time of the disposal is a member of the same group of companies, and^F1

(c)the asset is acquired by company D otherwise than as trading stock of any such trade carried on by it,^F1

company C is treated for the purposes of section 161 as having appropriated the asset immediately before the disposal for some purpose other than the purpose of use as trading stock.

(3)The trades to which this section applies are—^F1

(a)any trade carried on by a company resident in the United Kingdom, and^F1

(b)any trade carried on in the United Kingdom through a permanent establishment by a company not so resident.^F1F2