Finance Act 2008

Saving for intra-group transfers U.K.

16 (1) This paragraph applies where, on or after the relevant date— U.K.

(a) there is a sale of a pre-commencement integral feature,

(b) the buyer and seller are companies which are members of the same group, and

(c) the buyer's expenditure on the integral feature would (apart from this paragraph) be special rate expenditure.

(2) An integral feature is a pre-commencement integral feature if qualifying expenditure on it—

(a) was incurred by the seller before the relevant date and allocated to the seller's main pool, or

(b) was incurred by the seller on or after that date and allocated to the seller's main pool because of a previous election under this paragraph.

(3) The buyer and seller may jointly elect for paragraph 17 to apply.

(4) The election must be made by notice to an officer of Revenue and Customs within 2 years after the date on which the sale takes place.

(5) All such assessments and adjustments of assessments are to be made as are necessary to give effect to the election.

(6) Whether the buyer and seller are members of the same group is to be determined in accordance with section 170(3) to (6) of TCGA 1992.

(7) The “relevant date” has the same meaning as in paragraph 14.

17 (1) Where this paragraph applies, for the purposes of making allowances and charges under Part 2 of CAA 2001— U.K.

(a) the integral feature is treated as having been sold by the seller to the buyer at a price which gives rise to neither a balancing allowance nor a balancing charge, and

(b) the buyer's expenditure on the integral feature is treated as qualifying expenditure which is not special rate expenditure (and, if allocated to a pool, is to be allocated to the buyer's main pool).

(2) Allowances and charges are to be made under Part 2 of CAA 2001 to or on the buyer as if everything done to or by the seller had been done to or by the buyer.