Part VI Companies, oil, insurance etc.
Chapter I Companies
Transactions within groups
171AF1Notional transfers within a group.
1
This section applies where—
a
two companies (“A” and “B”) are members of a group of companies; and
b
A disposes of an asset to a person who is not a member of the group (“C”).
2
Subject to subsections (3) and (4) below, A and B may, by notice in writing to an officer of the Board, jointly elect that, for the purposes of corporation tax on chargeable gains—
a
the asset, or any part of it, shall be deemed to have been transferred by A to B immediately before the disposal to C;
b
section 171(1) shall be deemed to have applied to that transfer; and
c
the disposal of the asset or part to C shall be deemed to have been made by B.
3
No election may be made under subsection (2) above unless section 171(1) would have applied to an actual transfer of the asset or part from A to B.
4
An election under that subsection must be made before the second anniversary of the end of the accounting period of A in which the disposal to C was made.
5
Any payment by A to B, or by B to A, in pursuance of an agreement between them in connection with the election—
a
shall not be taken into account in computing profits or losses of either company for corporation tax purposes, and
b
shall not for any purposes of the Corporation Tax Acts be regarded as a distribution or a charge on income,
provided it does not exceed the amount of the chargeable gain or allowable loss that is treated, as a result of the disposal, as accruing to B.