Finance Act 2009

Q transferring asset to third person

17 (1) This paragraph applies to an asset if the first and second conditions are met.

(2) The first condition is that the asset is part of the subject matter of the first transaction and constitutes—

(a) plant or machinery, or

(b) an industrial building (or part of an industrial building).

(3) The second condition is that Q transfers the asset to any person other than P.

(4) At the time that Q transfers the asset, that other person is to be treated as becoming, and P is to be treated as ceasing to be, the owner of the asset.

(5) Accordingly, the transfer is to be treated—

(a) as regards plant or machinery, as a disposal event (in relation to P) occurring in the chargeable period in which the transfer takes place, and

(b) as regards an industrial building or part of an industrial building, as a balancing event (in relation to P) occurring in the chargeable period in which the transfer takes place.

(6) For the purposes of sub-paragraph (5)—

(a) in the case falling within paragraph (a), the disposal value that P is required to bring into account is the market value of the asset at the time of the transfer, and

(b) in the case falling within paragraph (b), P is to be treated as receiving, as the proceeds of the balancing event, the market value of the asset at the time of the transfer.