Part 14 U.K.Change in company ownership

Chapter 4U.K.Company with investment business: restrictions on relief: asset transferred within group

IntroductionU.K.

692Introduction to ChapterU.K.

(1)This Chapter applies if—

(a)there is a change in the ownership of a company with investment business (“the company”), and

(b)conditions 1 to 3 are met.

(2)Condition 1 is that none of conditions A to C in section 677 is met.

(3)Condition 2 is that after the change in ownership the company acquires an asset from another company in circumstances such that—

(a)section 171(1) of TCGA 1992 (no gain/no loss on transfer within group), or

(b)section 775 of CTA 2009 (tax-neutral transfer within group),

applies to the acquisition.

(4)Condition 3 is that—

(a)in a case within subsection (3)(a), a chargeable gain accrues to the company on a disposal of the asset within the period of 3 years beginning with the change in ownership, or

(b)in a case within subsection (3)(b), there is a non-trading chargeable realisation gain on the realisation of the asset within that period.

(5)For the purposes of subsection (4), an asset (P) acquired by the company as mentioned in subsection (3) is treated as the same as an asset (Q) owned at a later time by the company if the value of Q is derived in whole or in part from P.

(6)In particular, P is treated as the same as Q for those purposes if—

(a)Q is a freehold,

(b)P was a leasehold, and

(c)the lessee has acquired the reversion.

(7)In this Chapter—

  • the change in ownership” means the change in ownership mentioned in subsection (1),

  • the company” has the same meaning as in this section,

  • non-trading chargeable realisation gain” means a chargeable realisation gain (within the meaning of Part 8 of CTA 2009 (intangible fixed assets)) which is a non-trading credit for the purposes of that Part (see section 746 of that Act),

  • realisation” has the meaning given by section 734 of CTA 2009, and

  • the relevant gain” means the gain within subsection (4)(a) or (b).