Part VI Companies, oil, insurance etc.
Chapter I Companies
Transactions within groups
C1C2C3F1173 Transfers within a group: trading stock.
1
Where—
a
a company (“company A”) acquires an asset as trading stock of a trade to which this section applies,
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
c
the asset did not form part of the trading stock of any such trade carried on by company B,
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—
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,
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
c
the asset is acquired by company D otherwise than as trading stock of any such trade carried on by it,
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—
a
any trade carried on by a company resident in the United Kingdom, and
b
any trade carried on in the United Kingdom through a F2permanent establishment by a company not so resident.