Meaning of “tax-neutral transfer”
140(1)This paragraph applies to a transfer of an asset that is, by virtue of any provision of this Schedule, to be treated as a “tax-neutral” transfer.
(2)Where this paragraph applies—
(a)the transfer is regarded for the purposes of this Schedule as not involving any realisation of the asset by the transferor or any acquisition of that asset by the transferee, and
(b)the transferee is treated for the purposes of this Schedule as having held the asset at all times when it was held by the transferor and as having done all such things in relation to the asset as were done by the transferor.
(3)This means, in particular—
(a)that the original cost of the asset in the hands of the transferor is treated as the original cost in the hands of the transferee, and
(b)that all such debits and credits in relation to the asset as have been brought into account for tax purposes by the transferor under this Schedule are treated as if they had been so brought into account by the transferee.
The reference in paragraph (a) to the cost of the asset is to the cost recognised for tax purposes.