Law

Taxation of Chargeable Gains Act 1992

United Kingdom · statute

Ask the law about this More laws of United Kingdom For machines: Markdown

In force since 2026-04-06, as the publisher states.

Copy read on 2026-11-08. The page it was read from

Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.

sha256 f9aed293527c49bc307ce39718824dd476546cb6258ee7849e33903cae971e11

Contents: 804 provisions

Proposed changes to this act

No one has proposed a change to this act yet.

804 provisions

172 Transfer of United Kingdom branch or agency.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

173 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 permanent establishment by a company not so resident.

Propose a change

174 Disposal or acquisition outside a group.

(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) Schedule 2 shall apply in relation to a disposal of an asset by a company which is or has been a member of a group of companies, and which acquired the asset from another member of the group in a transfer to which section 171(1) applied, as if all members of the group for the time being were the same person, and as if the acquisition or provision of the asset by the group, so taken as a single person, had been the acquisition or provision of it by the member disposing of it. (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

175 Replacement of business assets by members of a group.

(1) Subject to subsection (2) below, for the purposes of sections 152 to 158 all the trades to which this section applies carried on by members of a group of companies shall, for the purposes of corporation tax on chargeable gains, be treated as a single trade ... . (1A) The trades to which this section applies are— (a) any trade carried on by a company that is resident in the United Kingdom, and (b) any trade carried on in the United Kingdom through a permanent establishment by a company not so resident. (2) Subsection (1) above does not apply where so much of the consideration for the disposal of the old assets as is applied in acquiring the new assets or the interest in them is so applied by a member of the group which is a dual resident investing company ... and in this subsection “the old assets” and “the new assets” have the same meanings as in section 152. (2A) Section 152 or 153 shall apply where— (a) the disposal is by a company which, at the time of the disposal, is a member of a group of companies, (b) the acquisition is by another company which, at the time of the acquisition, is a member of the same group, and (ba) the conditions in subsection (2AA) below are met, and (c) the claim is made by both companies, as if both companies were the same person. (2AA) The conditions referred to in subsection (2A)(ba) above are— (a) that the company making the disposal is resident in the United Kingdom at the time of the disposal, or the assets are chargeable assets in relation to that company immediately before that time, and (b) that the acquiring company is resident in the United Kingdom at the time of the acquisition, or the assets are chargeable assets in relation to that company immediately after that time. For this purpose an asset is a “chargeable asset” in relation to a company at any time if, were the asset to be disposed of by the company at that time, any gain accruing to the company would be a chargeable gain and would by virtue of section 2B(3) form part of its chargeable profits for corporation tax purposes. (2B) Section 152 or 153 shall apply where a company which is a member of a group of companies but is not carrying on a trade— (a) disposes of assets (or an interest in assets) used, and used only, for the purposes of the trade which (in accordance with subsection (1) above) is treated as carried on by the members of the group which carry on a trade, or (b) acquires assets (or an interest in assets) taken into use, and used only, for those purposes, as if the first company were carrying on that trade. (2C) Neither section 152 nor section 153 shall apply if the acquisition of, or of the interest in, the new assets— (a) is made by a company which is a member of a group of companies, and (b) is one to which any of the no gain/no loss provisions applies or is one where, by virtue of section 195B, 195C or 195E, neither a gain nor a loss accrues to the person making the disposal. (3) Section 154(2) applies where the company making the claim is a member of a group of companies— (a) as if all members of the group for the time being carrying on a trade to which this section applies were the same person, and (b) in accordance with subsection (1) above, as if all those trades were the same trade; so that the gain accrues to the member of the group holding the asset concerned on the occurrence of the event mentioned in section 154(2). (4) Subsection (2) above shall apply where the acquisition took place before 20th March 1990 and the disposal takes place within the period of 12 months beginning with the date of the acquisition or such longer period as the Board may by notice allow with the omission of the words from “or a company" to “the acquisition".

Propose a change

176 Depreciatory transactions within a group.

(1) This section has effect as respects a disposal of shares in, or securities of, a company (“the ultimate disposal”) if the value of the shares or securities has been materially reduced by a depreciatory transaction effected on or after 31st March 1982; and for this purpose “depreciatory transaction” means— (a) any disposal of assets at other than market value by one member of a group of companies to another, or (b) any other transaction satisfying the conditions of subsection (2) below, except that a transaction shall not be treated as a depreciatory transaction to the extent that it consists of a payment which is required to be or has been brought into account, for the purposes of corporation tax on chargeable gains, in computing a chargeable gain or allowable loss accruing to the person making the ultimate disposal. (2) The conditions referred to in subsection (1)(b) above are— (a) that the company, the shares in which, or securities of which, are the subject of the ultimate disposal, or any 75 per cent. subsidiary of that company, was a party to the transaction, and (b) that the parties to the transaction were or included 2 or more companies which at the time of the transaction were members of the same group of companies. (3) Without prejudice to the generality of subsection (1) above, the cancellation of any shares in or securities of one member of a group of companies under section 641 of the Companies Act 2006 shall, to the extent that immediately before the cancellation those shares or securities were the property of another member of the group, be taken to be a transaction fulfilling the conditions in subsection (2) above. (4) If the person making the ultimate disposal is, or has at any time been, a member of the group of companies referred to in subsection (1) or (2) above, any allowable loss accruing on the disposal shall be reduced to such extent as is just and reasonable having regard to the depreciatory transaction, but if the person making the ultimate disposal is not a member of that group when he disposes of the shares or securities, no reduction of the loss shall be made by reference to a depreciatory transaction which took place when that person was not a member of that group. (5) A reduction under subsection (4) above shall be made on the footing that the allowable loss ought not to reflect any diminution in the value of the company’s assets which was attributable to a depreciatory transaction, but allowance may be made for any other transaction on or after 31st March 1982 which has enhanced the value of the company’s assets and depreciated the value of the assets of any other member of the group. (6) If, under subsection (4) above, a reduction is made in an allowable loss, any chargeable gain accruing on a disposal of the shares or securities of any other company which was a party to the depreciatory transaction by reference to which the reduction was made, being a disposal not later than 6 years after the depreciatory transaction, shall be reduced to such extent as is just and reasonable having regard to the effect of the depreciatory transaction on the value of those shares or securities at the time of their disposal, but the total amount of any one or more reductions in chargeable gains made by reference to a depreciatory transaction shall not exceed the amount of the reductions in allowable losses made by reference to that depreciatory transaction. All such adjustments, whether by way of discharge or repayment of tax, or otherwise, as are required to give effect to the provisions of this subsection may be made at any time. (7) For the purposes of this section— (a) “securities” includes any loan stock or similar security whether secured or unsecured, (b) references to the disposal of assets include references to any method by which one company which is a member of a group appropriates the goodwill of another member of the group, ... (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) References in this section to the disposal of shares or securities include references to the occasion of the making of a claim under section 24(2) that the value of shares or securities has become negligible, and references to a person making a disposal shall be construed accordingly. (9) In any case where the ultimate disposal is not one to which section 35(2) applies, the references above to 31st March 1982 shall be read as references to 6th April 1965.

Propose a change

177 Dividend stripping.

(1) The provisions of this section apply where one company (“the first company”) has a holding in another company (“the second company”) and the following conditions are fulfilled— (a) that the holding amounts to, or is an ingredient in a holding amounting to, 10 per cent. of all holdings of the same class in the second company, (b) that the first company is not a dealing company in relation to the holding, (c) that a distribution is or has been made to the first company in respect of the holding, and (d) that the effect of the distribution is that the value of the holding is or has been materially reduced. (2) Where this section applies in relation to a holding, section 176 shall apply, subject to subsection (3) below, in relation to any disposal of any shares or securities comprised in the holding, whether the disposal is by the first company or by any other company to which the holding is transferred by a transfer to which section 140A, or 171 applies, as if the distribution were a depreciatory transaction and, if the companies concerned are not members of a group of companies, as if they were. (3) The distribution shall not be treated as a depreciatory transaction to the extent that it consists of a payment which is required to be or has been brought into account, for the purposes of corporation tax on chargeable gains, in computing a chargeable gain or allowable loss accruing to the person making the ultimate disposal. (4) This section shall be construed as one with section 176, and in any case where the ultimate disposal is not one to which section 35(2) applies, the reference in subsection (1)(c) above to a distribution does not include a distribution made before 30th April 1969. (5) For the purposes of this section a company is “a dealing company” in relation to a holding if a profit on the sale of the holding would be taken into account in computing the company’s trading profits. (6) References in this section to a holding in a company refer to a holding of shares or securities by virtue of which the holder may receive distributions made by the company, but so that— (a) a company’s holdings of different classes in another company shall be treated as separate holdings, and (b) holdings of securities which differ in the entitlements or obligations they confer or impose shall be regarded as holdings of different classes. (7) For the purposes of subsection (1) above— (a) all a company’s holdings of the same class in another company are to be treated as ingredients constituting a single holding, and (b) a company’s holding of a particular class shall be treated as an ingredient in a holding amounting to 10 per cent. of all holdings of that class if the aggregate of that holding and other holdings of that class held by connected persons amounts to 10 per cent. of all holdings of that class, and section 286 shall have effect in relation to paragraph (b) above as if, in subsection (7) of that section, after the words “or exercise control of" in each place where they occur there were inserted the words “ or to acquire a holding in ”.

Propose a change

177A Restriction on set-off of pre-entry losses.

Schedule 7A to this Act (which makes provision in relation to losses accruing to a company before the time when it becomes a member of a group of companies ... ) shall have effect.

Propose a change

177B Restrictions on setting losses against pre-entry gains.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

178 Company ceasing to be member of group: pre-appointed day cases.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

179 Company ceasing to be member of group: post-appointed day cases.

(1) This section applies where— (a) a company (“company A”) acquires an asset from another company (“company B”) at a time when company A and company B are members of the same group, (b) the conditions in subsection (1A) below are met, and (c) company A ceases to be a member of that group within the period of six years after the time of the acquisition. References in this section to a company ceasing to be a member of a group of companies do not apply to cases where a company ceases to be a member of a group in consequence of another member of the group ceasing to exist. (1A) The conditions referred to in subsection (1)(b) above are— (a) that company A is resident in the United Kingdom at the time it acquires the asset, or the asset is a chargeable asset in relation to that company immediately after that time, and (b) that company B is resident in the United Kingdom at the time of that acquisition, or the asset is a chargeable asset in relation to that company immediately before that time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1AA) If shares in a company are transferred as part of the process of the transfer of a business to which section 140A or 140C applies and in consequence of the transfer the company ceases to be a member of a group (“Group 1”)— (a) the company shall not be treated for the purposes of this section as having left Group 1, and (b) if the transferee is a member of a group (“Group 2”) and in consequence of the transfer the company becomes a member of Group 2 it shall be treated, for the purposes of this section, as if Group 1 and Group 2 were the same. (1B) Where, as part of the process of a merger to which section 140E applies, a company which is a member of a group (“Group 1”) ceases to exist and in consequence of that cessation— (a) assets are transferred to the transferee, or (b) shares in one or more companies which were also members of the group are transferred to the transferee, a company which has ceased to exist, or the shares in which have been transferred to the transferee, shall not be treated for the purposes of this section as having left Group 1. (1C) If subsection (1B) applies in relation to a company then for the purposes of this section— (a) the transferee and a company which has ceased to exist in consequence of the merger shall be treated as the same entity, and (b) if the transferee is a member of a group (“Group 2”) following the merger (whether or not as the principal company of the group) a company which was a member of Group 1 and became a member of Group 2 in consequence of the merger shall be treated, for the purposes of this section, as if Group 1 and Group 2 were the same. (1D) In subsections (1B) and (1C), “transferor” and “transferee” have the meaning given by section 140E(9). (2) Where two companies cease to be members of the group at the same time, subsection (1) does not have effect as respects the acquisition of an asset by one of the companies from the other if condition A or B is met. (2ZA) Condition A is that the companies— (a) are both 75 per cent subsidiaries and effective 51 per cent subsidiaries of another company on the date of the acquisition, and (b) remain both 75 per cent subsidiaries and effective 51 per cent subsidiaries of that other company until immediately after they cease to be members of the group. (2ZB) Condition B is that one of the companies— (a) is both a 75 per cent subsidiary and an effective 51 per cent subsidiary of the other on the date of the acquisition, and (b) remains both a 75 per cent subsidiary and an effective 51 per cent subsidiary of the other until immediately after the companies cease to be members of the group. (2A) Subsection (2AA) applies where— (a) a company (“company A”) acquired an asset from another company (“company B”) at a time when both company A and company B were members of the same group (“the first group”), (aa) company A has ceased to be a member of the first group, (b) subsection (2) above applies in the case of company A’s ceasing to be a member of the first group so that subsection (1) above does not have effect as respects the acquisition of that asset, (c) at the time company A ceases to be a member of the first group there is a connection between that group and the group of companies of which company A becomes a member on leaving the first group (“the second group”), and (d) subsequently— (i) company A ceases to be a member of the second group, or (ii) (before sub-paragraph (i) applies) there ceases to be a connection between the two groups. (2AA) Where this subsection applies— (a) in a case within subsection (2A)(d)(ii), for the purposes of this section (other than subsection (2A)) as it applies as respects the acquisition, company A and any associated company are to be treated as having ceased to be members of the second group at the time the connection between the two groups ceases, (b) subsection (1) has effect in relation to company A's ceasing to be a member of the second group as if it had been the second group of which both companies had been members at the time of the acquisition, and (c) subsection (2) may operate to prevent subsection (1) applying by virtue of paragraph (b), unless subsection (2AB) applies. (2AB) This subsection applies if company A's ceasing to be a member of the first group at the same time as one or more associated companies forms part of arrangements the main purpose, or one of the main purposes, of which is the avoidance of a liability to corporation tax. (2B) For the purposes of subsection (2A) above there is a connection between the first group and the second group at a particular time if, at that time,, the company which is the principal company of that group is under the control of— (a) the company which is the principal company of the first group or, if that group no longer exists, which was the principal company of that group when company A ceased to be a member of it; (b) any person or persons who control the company mentioned in paragraph (a) above or who have had it under their control at any time in the period since company A ceased to be a member of the first group; or (c) any person or persons who have, at any time in that period, had under their control either— (i) a company which would have been a person falling within paragraph (b) above if it had continued to exist, or (ii) a company which would have been a person falling within this paragraph (whether by reference to a company which would have been a person falling within that paragraph or to a company or series of companies falling within this sub-paragraph). (2C) This section shall not have effect as respects any asset if, before the time when company A ceases to be a member of the group or, as the case may be, the second group, an event has already occurred by virtue of which the company falls by virtue of section 101A(3) to be treated as having sold and immediately reacquired the asset at the time specified in subsection (3) below. (2D) This section shall not have effect as respects any asset if, before the time when company A ceases to be a member of the group or, as the case may be, the second group, an event has already occurred by virtue of which the company falls by virtue of section 101C(3) to be treated as having sold and immediately reacquired the asset at the time specified in subsection (3) below. (3) If, when company A ceases to be a member of the group, company A, or an associated company also leaving the group, owns, otherwise than as trading stock— (a) the asset, or (b) property to which a chargeable gain has been carried forward from the asset on a replacement of business assets, then, subject to subsection (4) below, company A shall be treated for all the purposes of this Act as if immediately after its acquisition of the asset it had sold, and immediately reacquired, the asset at market value at that time. (3A) Any chargeable gain or allowable loss which would otherwise accrue to company A on the sale referred to in subsection (3) does not so accrue if— (a) company A ceases to be a member of the group in consequence of— (i) a disposal of shares in company A or another member of the group made by a member of the group, or (ii) two or more such disposals, (b) either— (i) subsection (3B) applies to the disposal or, if there is more than one disposal, to at least one of them, or (ii) sub-paragraph (i) does not apply but had subsection (3B) applied to the disposal or, if there is more than one disposal, to each of them, any gain arising on the disposal or disposals would not have been a chargeable gain by virtue of Schedule 7AC, and (c) in the absence of this subsection, section 535 of CTA 2010 (UK REITS: exemption of gains) would not apply to the chargeable gain or allowable loss which would accrue to company A on the sale. (3B) This subsection applies to a disposal of shares if— (a) the company making the disposal is resident in the United Kingdom at the time of the disposal, (b) the shares are chargeable assets in relation to that company immediately before that time, or (c) any part of the chargeable gain or allowable loss accruing on the disposal is treated as a gain or loss accruing to a person by virtue of section 3 (attribution of gains to members of non-resident companies). In this section “group disposal” means a disposal within subsection (3A)(a) to which this subsection applies and the company making the disposal is referred to as “the transferor company”. (3C) For the purposes of subsections (3A) and (3B), the question whether there is a disposal is to be determined ignoring section 127 (share reorganisations etc treated as not involving disposal). (3D) If subsection (3A) applies, any chargeable gain or allowable loss accruing to the transferor company on a group disposal (other than a group disposal to which section 127 applies) is to be calculated— (a) where a chargeable gain would accrue to company A in the absence of subsection (3A), as if the amount of the consideration for the group disposal were increased by the amount of the gain, and (b) where an allowable loss would accrue to company A in the absence of subsection (3A), as if an amount equal to the amount of the loss were a sum allowable under section 38 as a deduction in the computation of the gain or loss accruing on the group disposal. (3E) If subsection (3A) applies, and section 127 applies to a group disposal, any chargeable gain or allowable loss accruing to the transferor company on a disposal of the new holding arising from the group disposal (or any part of that holding) is to be calculated— (a) where a chargeable gain would accrue to company A in the absence of subsection (3A)— (i) as if an amount equal to the amount of the gain were excluded from the expenditure allowable as a deduction under section 38 in the computation of the gain or loss accruing on the disposal (but not so as to reduce that expenditure below nil), and (ii) where (ignoring sub-paragraph (i)) the amount of the gain exceeds the expenditure allowable as such a deduction, as if a gain equal to that excess accrued on the disposal of the new holding (or, if the disposal is of a part of the new holding, a gain equal to the corresponding part of that excess accrued on that disposal), in addition to any gain or loss that actually accrues on the disposal of the new holding or part, and (b) where an allowable loss would accrue to company A in the absence of subsection (3A), as if an amount equal to the amount of the loss were a sum allowable under section 38 as a deduction in the computation of the gain or loss accruing on the disposal. In this subsection “new holding” has the meaning given by section 126. (3F) If there is more than one group disposal, the references in subsections (3D) and (3E) to the amount of the gain or loss which would accrue to company A in the absence of subsection (3A) are to be read, in relation to each disposal, as references to— (a) such proportion of that amount as the transferor companies in relation to the group disposals jointly elect as the appropriate proportion in relation to the disposal in question, or (b) where no election is made, the proportion of that amount attributable to that disposal if that amount is divided equally between the group disposals. (3G) An election under subsection (3F) must— (a) specify the appropriate proportion in relation to each group disposal, and (b) be made, by notice to an officer of Revenue and Customs, no later than 2 years after the end of the first accounting period of a company in which any chargeable gain or allowable loss on a group disposal accrues. (3H) If a group disposal by a company consists of shares of more than one class, then, for the purposes of subsections (3D) and (3E), the company may apportion any increase or deduction to be made between the classes of shares in such manner as it considers appropriate. (4) Any chargeable gain or allowable loss accruing to company A on the sale referred to in subsection (3) above shall be treated as accruing to company A at whichever is the later of the following, that is to say— (a) the time immediately after the beginning of the accounting period of that company in which or, as the case may be, at the end of which the company ceases to be a member of the group; and (b) the time when under subsection (3) above it is treated as having reacquired the asset; and sections 138 to 142 of CTA 2010 have effect accordingly as if the actual circumstances were as they are treated as having been. (5) Subsections (6) to (8) apply where— (a) in the absence of subsection (6), company A would be treated by virtue of subsection (3) as selling an asset at any time, by reason of ceasing to be a member of the group, and (b) company A ceases to be a member of the group by reason only of the fact that the principal company of that group becomes a member of another group. (6) Subsection (3) does not apply to treat company A as selling the asset at that time; but if— (a) within 6 years of that time company A ceases at any time (“the relevant time”) to satisfy the following conditions, and (b) at the relevant time, company A, or a company in the same group as that company, owns otherwise than as trading stock the asset or property to which a chargeable gain has been carried forward from the asset on a replacement of business assets, company A shall be treated for all the purposes of this Act as if, immediately after its acquisition of the asset, it had sold and immediately reacquired the asset at the value that, at the time of acquisition, was its market value. (7) Those conditions are— (a) that company A is a 75 per cent. subsidiary of one or more members of the other group referred to in subsection (5) above, and (b) that company A is an effective 51 per cent. subsidiary of one or more of those members. (7A) Any chargeable gain or allowable loss which would otherwise accrue to company A on the sale referred to in subsection (6) does not so accrue if— (a) company A ceases at the relevant time to satisfy the conditions in subsection (7) in consequence of— (i) a disposal of shares in company A, or another member of the other group mentioned in subsection (5)(b), made by a member of that other group, or (ii) two or more such disposals, (b) either— (i) subsection (3B) applies to the disposal or, if there is more than one disposal, to at least one of them, or (ii) sub-paragraph (i) does not apply but had subsection (3B) applied to the disposal or, if there is more than one disposal, to each of them, any gain arising on the disposal or disposals would not have been a chargeable gain by virtue of Schedule 7AC, and (c) in the absence of this subsection, section 535 of CTA 2010 (UK REITS: exemption of gains) would not apply to the chargeable gain or allowable loss which would accrue to company A on the sale. (7B) Where subsection (7A) applies, subsections (3C) to (3H) apply to the calculation of any chargeable gain or allowable loss accruing on a disposal within subsection (7A)(a) to which subsection (3B) applies (a “relevant disposal”) with the following modifications— (a) in subsections (3C) to (3H) for the references to a group disposal substitute references to a relevant disposal, and (b) in subsections (3C), (3D) and (3E) for the references to subsection (3A) substitute references to subsection (7A). (8) Any chargeable gain or allowable loss accruing to company A on the sale referred to in subsection (6) is to be treated as accruing immediately before the relevant time. (9) Where— (a) by virtue of this section a company is treated as having sold an asset at any time, and (b) if at that time the company had in fact sold the asset at market value at that time, then, by virtue of section 30 or 31, any allowable loss or chargeable gain accruing on the disposal would have been calculated as if the consideration for the disposal were increased by an amount, subsections (3) and (6) above shall have effect as if the market value at that time had been that amount greater. (9A) Sections 450 and 451 of CTA 2010 (meaning of control) shall have effect for the purposes of subsection (2B) above as they have effect for the purposes of Part 10 of CTA 2010; but a person carrying on a business of banking shall not for the purposes of that subsection be regarded as having control of any company by reason only of having, or of the consequences of having exercised, any rights of that person in respect of loan capital or debt issued or incurred by the company for money lent by that person to the company in the ordinary course of that business. (10) For the purposes of this section— (a) two companies are associated with each other if one is a 75 per cent subsidiary of the other or both are 75 per cent subsidiaries of another company, (b) a chargeable gain is carried forward from an asset to other property on a replacement of business assets if, by one or more claims under sections 152 to 158, the chargeable gain accruing on a disposal of the asset is reduced, and as a result an amount falls to be deducted from the expenditure allowable in computing a gain accruing on the disposal of the other property, (c) an asset acquired by company A shall be treated as the same as an asset owned at a later time by that company or an associated company if the value of the second asset is derived in whole or in part from the first asset, and in particular where the second asset is a freehold, and the first asset was a leasehold and the lessee has acquired the reversion. (10A) For the purposes of this section an asset is a “chargeable asset” in relation to a company at any time if any gain accruing to the company on a disposal of the asset by the company at that time— (a) would be a chargeable gain chargeable to corporation tax as a result of section 2B(3) or (4), or (b) would, but for Schedule 7AC (exemptions for disposals by companies with substantial shareholdings), be within paragraph (a). (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13) Where under this section company A is to be treated as having disposed of, and reacquired, an asset, all such recomputations of liability in respect of other disposals, and all such adjustments of tax, whether by way of assessment or by way of discharge or repayment of tax, as may be required in consequence of the provisions of this section shall be carried out.

Propose a change

179ZA Claim for adjustment of calculations under section 179

(1) This section applies where— (a) a gain accrues to a company (“company A”) on a sale referred to in subsection (3) or (6) of section 179, or (b) a gain would so accrue but for subsection (3A) or (7A) of that section. (2) If subsection (3D) or (3E) of that section applies in relation to one or more group disposals (within the meaning of that section)— (a) the company making the disposal, or (b) if there is more than one disposal, the companies making those disposals acting jointly, may make a claim for the amount of the gain to be treated for the purposes of the subsection in question as reduced by an amount specified in the claim. (3) In any other case, company A may make a claim for the amount of the gain to be treated for all purposes of this Act as reduced by an amount specified in the claim. (4) Where a claim is made under subsection (2) or (3), the gain must be treated, for the purposes mentioned in the subsection in question, as reduced by such amount (if any) as is just and reasonable. (5) In determining the amount which is just and reasonable regard must be had, in particular, to any transaction as a direct or indirect result of which company A or any associated company (within the meaning of section 179(10)) acquired the asset to which the gain relates. (6) Where under this section the gain accruing to company A on a sale referred to in subsection (3) or (6) of section 179 is treated as reduced by an amount (“the permitted deduction”), the subsection in question has effect, so far as it provides for the immediate reacquisition of the asset by company A, as if the reference to market value of the asset were to its market value less the permitted deduction.

Propose a change

179A Reallocation within group of gain or loss accruing under section 179

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

179B Roll-over of degrouping charge on business assets

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

180 Transitional provisions.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

181 Exemption from charge under 178 or 179 in the case of certain mergers.

(1) Subject to the following provisions of this section, section 179 shall not apply in a case where— (a) as part of a merger, a company (“company A”) ceases to be a member of a group of companies (“the A group”); and (b) ... the merger was carried out for bona fide commercial reasons and ... the avoidance of liability to tax was not the main or one of the main purposes of the merger. (2) In this section “merger” means an arrangement (which in this section includes a series of arrangements)— (a) whereby one or more companies (“the acquiring company” or, as the case may be, “the acquiring companies”) none of which is a member of the A group acquires or acquire, otherwise than with a view to their disposal, one or more interests in the whole or part of the business which, before the arrangement took effect, was carried on by company A; and (b) whereby one or more members of the A group acquires or acquire, otherwise than with a view to their disposal, one or more interests in the whole or part of the business or each of the businesses which, before the arrangement took effect, was carried on either by the acquiring company or acquiring companies or by a company at least 90 per cent. of the ordinary share capital of which was then beneficially owned by 2 or more of the acquiring companies; and (c) in respect of which the conditions in subsection (4) below are fulfilled. (3) For the purposes of subsection (2) above, a member of a group of companies shall be treated as carrying on as one business the activities of that group. (4) The conditions referred to in subsection (2)(c) above are— (a) that not less than 25 per cent. by value of each of the interests acquired as mentioned in paragraphs (a) and (b) of subsection (2) above consists of a holding of ordinary share capital, and the remainder of the interest, or as the case may be of each of the interests, acquired as mentioned in subsection (2)(b), consists of a holding of share capital (of any description) or debentures or both; and (b) that the value or, as the case may be, the aggregate value of the interest or interests acquired as mentioned in subsection (2)(a) above is substantially the same as the value or, as the case may be, the aggregate value of the interest or interests acquired as mentioned in subsection (2)(b) above; and (c) that the consideration for the acquisition of the interest or interests acquired by the acquiring company or acquiring companies as mentioned in subsection (2)(a) above, disregarding any part of that consideration which is small by comparison with the total, either consists of, or is applied in the acquisition of, or consists partly of and as to the balance is applied in the acquisition of, the interest or interests acquired by members of the A group as mentioned in subsection (2)(b) above; and for the purposes of this subsection the value of an interest shall be determined as at the date of its acquisition. (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

182 Disposals of debts.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

183 Disposals of shares.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

184 Definitions and other provisions supplemental to sections 182 and 183.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

184A Restrictions on buying losses: tax avoidance schemes

(1) This section applies for the purposes of corporation tax in respect of chargeable gains if— (a) at any time (“the relevant time”) there is a qualifying change of ownership in relation to a company (“the relevant company”) (see section 184C), (b) a loss (a “qualifying loss”) accrues to the relevant company or any other company on a disposal of a pre-change asset (see subsection (3)), (c) the change of ownership occurs directly or indirectly in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage (see section 184D), and (d) the advantage involves the deduction of a qualifying loss from any chargeable gains (whether or not it also involves anything else). (2) A qualifying loss accruing to a company is not to be deductible from chargeable gains accruing to the company ... . (3) In this section a “pre-change asset” means an asset which was held by the relevant company before the relevant time (but see also sections 184E and 184F). (4) In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable). (5) For the purposes of this section it does not matter— (a) whether a qualifying loss accrues before, after or at the relevant time, (b) whether a qualifying loss accrues at a time when there are no chargeable gains from which it could be deducted (or could otherwise have been deducted), or (c) whether the tax advantage is secured for the company to which a qualifying loss accrues or for any other company.

Propose a change

184B Restrictions on buying gains: tax avoidance schemes

(1) This section applies for the purposes of corporation tax in respect of chargeable gains if— (a) at any time (“the relevant time”) there is a qualifying change of ownership in relation to a company (“the relevant company”) (see section 184C), (b) a gain (a “qualifying gain”) accrues to the relevant company or any other company on a disposal of a pre-change asset (see subsection (3)), (c) the change of ownership occurs directly or indirectly in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage, and (d) the advantage involves the deduction of a loss from a qualifying gain (whether or not it also involves anything else). (2) In the case of a qualifying gain accruing to a company, a loss accruing to the company is not to be deductible from the gain ... . (3) In this section a “pre-change asset” means an asset which was held by the relevant company before the relevant time (but see also sections 184E and 184F). (4) In this section “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable). (5) For the purposes of this section it does not matter— (a) whether a qualifying gain accrues before, after or at the relevant time, (b) whether a qualifying gain accrues at a time when there are no losses which could be deducted (or could otherwise have been deducted) from the gain, or (c) whether the tax advantage is secured for the company to which a qualifying gain accrues or for any other company.

Propose a change

184C Sections 184A and 184B: meaning of “qualifying change of ownership”

(1) For the purposes of sections 184A and 184B, there is a qualifying change of ownership in relation to a company at any time if any one or more of the following occur at that time— (a) the company joins a group of companies (see subsections (2) to (5)), (b) the company ceases to be a member of a group of companies, (c) the company becomes subject to different control (see subsections (6) to (9)). (2) Whether a company is a member of a group of companies at any time is determined in accordance with section 170. (3) But, apart from in the excepted case, nothing in section 170(10) or (10A) is to prevent all the companies of one group from being regarded as joining another group when the principal company of the first group becomes a member of the other group at any time. (4) The excepted case is the case where— (a) the persons owning the shares of the principal company of the first group immediately before that time are the same as the persons owning the shares of the principal company of the other group immediately after that time, (b) the principal company of the other group was not the principal company of any group immediately before that time, and (c) immediately after that time the principal company of the other group had assets consisting entirely (or almost entirely) of shares of the principal company of the first group. (5) For this purpose, references to shares of a company are to the shares comprised in the issued share capital of the company. (6) The general rule is that a company becomes subject to different control at any time if any one or more of the following occur— (a) a person has control of the company at that time (whether alone or together with one or more others) and the person did not previously have control of the company, (b) a person has control of the company at that time together with one or more others and the person previously had control of the company alone, (c) a person ceases to have control of the company at that time (whether the person had control alone or together with one or more others). (7) The general rule is subject to the following exceptions. (8) A company does not become subject to different control in any case where it joins a group of companies and the case is the excepted case mentioned above. (9) A company (“the subsidiary”) does not become subject to different control at any time in any case where— (a) immediately before that time the subsidiary is the 75 per cent. subsidiary of another company, and (b) (although there is a change in the direct ownership of the subsidiary) that other company continues immediately after that time to own it as a 75 per cent. subsidiary.

Propose a change

184D Sections 184A and 184B: meaning of “tax advantage”

For the purposes of sections 184A and 184B, “tax advantage” means— (a) relief or increased relief from corporation tax, (b) repayment or increased repayment of corporation tax, (c) the avoidance or reduction of a charge to corporation tax or an assessment to corporation tax, or (d) the avoidance of a possible assessment to corporation tax.

Propose a change

184E Sections 184A and 184B: “pre-change assets”: basic rules

(1) If— (a) a company other than the relevant company makes a disposal of an asset, and (b) the asset has been disposed of at any time after the relevant time by a disposal to which section 171(1) does not apply (a “non-section 171(1) transfer”), the asset ceases to be regarded as a pre-change asset for the purposes of sections 184A and 184B (but see also subsections (10) and (11)). (2) But (without affecting the generality of the provision made by the following subsection) if, on a non-section 171(1) transfer,— (a) an asset would cease to be regarded as a pre-change asset as a result of subsection (1), and (b) the company making the non-section 171(1) transfer retains any interest in or over the asset, that interest is to be regarded as a pre-change asset for the purposes of sections 184A and 184B. (3) If— (a) the relevant company or any other company holds an asset (“the new asset”) at or after the relevant time, (b) the value of the new asset derives in whole or in part from a pre-change asset, and (c) the new asset is not acquired by the company concerned as a result of a non-section 171(1) transfer, the new asset is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B. (4) For this purpose the cases in which the value of an asset may be derived from any other asset include any case where— (a) assets have been merged or divided, (b) assets have changed their nature, or (c) rights or interests in or over assets have been created or extinguished. (5) If a pre-change asset is “the old asset” for the purposes of section 116 (reorganisations, conversions and reconstructions), “the new asset” for the purposes of that section is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B. (6) If a pre-change asset is the “original shares” for the purposes of sections 127 to 131 (reorganisation or reduction of share capital), the “new holding” for the purposes of those sections is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B. (7) The following subsection applies if, as a result of the application of a relevant deferral provision in the case of a disposal of a pre-change asset (“the original disposal”),— (a) a gain or loss that would otherwise accrue to a company does not so accrue, or (b) any part of any such gain is treated as forming part of a single chargeable gain which does not accrue to the company on the original disposal, and a gain or loss does, wholly or partly in consequence of the application of that provision in the case of the original disposal, accrue to the company or any other company on a subsequent occasion. (8) So much of the gain or loss accruing on the subsequent occasion as accrues in consequence of the application of the relevant deferral provision in the case of the original disposal is to be regarded for the purposes of sections 184A and 184B as accruing on a disposal of a pre-change asset (so far as it would not otherwise be so regarded). (9) A “relevant deferral provision” means any of the following— (a) section 139 (reconstruction involving transfer of business), (b) section 140 (postponement of charge on transfer of assets to non-resident company), (c) section 140A (transfer of a UK trade), (d) section 140E (merger leaving assets within UK tax charge), (e) sections 152 and 153 (replacement of business assets), (f) section 187 (postponement of charge on deemed disposal under section 185). (10) If— (a) a pre-change asset of the relevant company is transferred to another company (“the transferee company”), (b) any of sections 139, 140A and 140E apply to the companies in the case of the asset, and (c) the transfer of the asset is made directly or indirectly in consequence of, or otherwise in connection with, the arrangements mentioned in section 184A or 184B, the asset is to be regarded as a “pre-change asset” in the hands of the transferee company for the purposes of sections 184A and 184B. (11) In such a case, subsection (1) applies as if the reference in paragraph (a) of that subsection to the relevant company were to the transferee company.

Propose a change

184F Sections 184A and 184B: “pre-change assets”: pooling rules

(1) This section applies, in the case of any pre-change asset of the relevant company or any pre-change asset of any company which is acquired on a disposal to which section 171(1) applies, if— (a) the pre-change asset consists of a holding of securities which falls as a result of any provision of Chapter 1 of Part 4 to be regarded as a single asset (“the pre-change pooled asset”), and (b) as a result of any disposal or acquisition at any time after the relevant time, any securities (“the other securities”) would (but for this section) be regarded as forming part of the pre-change pooled asset. (2) None of the other securities are to be regarded for the purposes of this Act as forming part of the pre-change pooled asset. (3) But this does not prevent the other securities from being regarded, as a result of any provision of that Chapter, as forming part of or constituting a different, single asset (“the other pooled asset”). (4) Securities of the same class as the other securities which are disposed of at or after the relevant time— (a) are to be identified first with the other securities or securities forming part of the other pooled asset, (b) are to be identified next with securities forming part of the pre-change pooled asset (if the number of securities disposed of exceeds the number identified in accordance with paragraph (a)), and (c) subject to paragraphs (a) and (b), are to be identified in accordance with the provisions applicable apart from those paragraphs. (5) The above identification rules apply even if some or all of the securities disposed of are otherwise identified— (a) by the disposal, or (b) by a transfer or delivery giving effect to it; but where a company disposes of securities in one capacity, they are not to be identified with securities which it holds, or can dispose of, only in some other capacity. (6) Chapter 1 of Part 4 has effect subject to this section. (7) In this section— “pre-change asset” means an asset which is pre-change asset for the purposes of section 184A or 184B, “securities” does not include relevant securities as defined in section 108 but, subject to that, means— shares or securities of a company, and any other assets where they are of a nature to be dealt in without identifying the particular assets disposed of or acquired. (8) For the purposes of this section, shares or securities of a company are not to be treated as being of the same class unless— (a) they are so treated by the practice of a recognised stock exchange, or (b) they would be so treated if dealt with on a recognised stock exchange.

Propose a change

184G Avoidance involving losses: schemes converting income to capital

(1) This section applies for the purposes of corporation tax in respect of chargeable gains if conditions A to D are satisfied. (2) Condition A is that a receipt or other amount arises to a company directly or indirectly in consequence of, or otherwise in connection with, any arrangements. (3) Condition B is that— (a) that amount falls to be taken into account in calculating a chargeable gain (the “relevant gain”) which accrues to a company (“the relevant company”), and (b) losses accrue (or have accrued) to the relevant company (whether before or after or as part of the arrangements). (4) Condition C is that, but for the arrangements, an amount would have fallen to be taken into account wholly or partly instead of the amount mentioned in subsection (2) in calculating the income chargeable to corporation tax— (a) of the relevant company, or (b) of a company which, at any qualifying time, is a member of the same group as the relevant company. (5) Condition D is that— (a) the main purpose of the arrangements, or (b) one of the main purposes of the arrangements, is to secure a tax advantage that involves the deduction of any of the losses from the relevant gain (whether or not it also involves anything else). (6) If the Board consider, on reasonable grounds, that conditions A to D are or may be satisfied, they may give the relevant company a notice in respect of the arrangements (but see also section 184I). (7) If, when the notice is given, conditions A to D are satisfied, no loss accruing to the relevant company at any time is to be deductible from the relevant gain. (8) A notice under this section must— (a) specify the arrangements, (b) specify the accounting period in which the relevant gain accrues, and (c) inform the relevant company of the effect of this section. (9) If relevant gains accrue in more than one accounting period, a single notice under this section may specify all the accounting periods concerned. (10) In this section— “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), “group”, in relation to companies, means a group determined in accordance with section 170, “qualifying time”, in relation to any arrangements, means any time which falls in the period— beginning with the time at which the arrangements are made, and ending with the time at which the matters (other than any tax advantage) intended to be secured by the arrangements are secured, “tax advantage” has the meaning given by section 184D.

Propose a change

184H Avoidance involving losses: schemes securing deductions

(1) This section applies for the purposes of corporation tax in respect of chargeable gains if conditions A to D are satisfied. (2) Condition A is that— (a) a chargeable gain (the “relevant gain”) accrues to a company (“the relevant company”) directly or indirectly in consequence of, or otherwise in connection with, any arrangements, and (b) losses accrue (or have accrued) to the relevant company ... (whether before or after or as part of the arrangements). (3) Condition B is that the relevant company, or a company connected with the relevant company, becomes entitled to an income deduction directly or indirectly in consequence of, or otherwise in connection with, the arrangements. (4) Condition C is that the main purpose, or one of the main purposes, of the arrangements is to secure a tax advantage that involves both— (a) that income deduction, and (b) the deduction of any of the losses from the relevant gain, whether or not it also involves anything else. (5) Condition D is that the arrangements are not excluded arrangements. For this purpose arrangements are excluded arrangements if— (a) the arrangements are made in respect of land or any estate or interest in land, (b) the arrangements fall within section 835(1) or 836(1) of CTA 2010 (sale and lease-back: limitation on tax reliefs), (c) the person to whom the payment mentioned in that subsection is payable is not a company connected with the relevant company, and (d) the arrangements are made between persons dealing at arm's length. (6) If the Board consider, on reasonable grounds, that conditions A to D are or may be satisfied, they may give the company a notice in respect of the arrangements (but see also section 184I). (7) If, when the notice is given, conditions A to D are satisfied, no loss accruing to the company at any time is to be deductible from the relevant gain. (8) A notice under this section must— (a) specify the arrangements, (b) specify the accounting period in which the relevant gain accrues, and (c) inform the relevant company of the effect of this section. (9) If relevant gains accrue in more than one accounting period, a single notice under this section may specify all the accounting periods concerned. (10) In this section— “arrangements” includes any agreement, understanding, scheme, transaction or series of transactions (whether or not legally enforceable), “income deduction” means— a deduction in calculating income for corporation tax purposes, or a deduction from total profits, “tax advantage” has the meaning given by section 184D. (11) For the purposes of this section it does not matter whether the tax advantage is secured for the relevant company or for any other company.

Propose a change

184I Notices under sections 184G and 184H

(1) Subsection (2) applies if— (a) the Board give a notice under section 184G or 184H (a “relevant notice”) to a company that specifies an accounting period, and (b) the notice is given before the company has made its company tax return for that accounting period. (2) If the company makes its return for that period before the end of the applicable 90 day period (see subsection (12)), it may— (a) make a return that disregards the notice, and (b) at any time after making the return and before the end of the applicable 90 day period, amend the return for the purpose of complying with the provision referred to in the notice. (3) If a company has made a company tax return for an accounting period, the Board may give the company a relevant notice in relation to that period only if a notice of enquiry has been given to the company in respect of its return for that period. (4) After any enquiries into the return for that period have been completed in relation to any matters, the Board may give the company a relevant notice relating to those matters only if requirements A and B are met. (5) Requirement A is that at the time the enquiries referred to in subsection (4) were completed, the Board could not have been reasonably expected, on the basis of information made available— (a) to them before that time, or (b) to an officer of theirs before that time, to have been aware that the circumstances were such that a relevant notice could have been given to the company in relation to that period. (6) For the purposes of requirement A, paragraph 44(2) and (3) of Schedule 18 to the Finance Act 1998 (information made available) applies as it applies for the purposes of paragraph 44(1). (7) Requirement B is that— (a) the company or any other person was requested to produce or provide information during an enquiry into the return for that period (so far as relating to the matters in question), and (b) if the request had been duly complied with, the Board could reasonably have been expected to give the company a relevant notice in relation to that period. (8) If— (a) a company makes a company tax return for an accounting period, and (b) the company is subsequently given a relevant notice that specifies that period, it may amend the return for the purpose of complying with the provision referred to in the notice at any time before the end of the applicable 90 day period. (9) If the relevant notice is given to the company after it has been given a notice of enquiry in respect of its return for the period, no closure notice may be given in relation to its company tax return until— (a) the end of the applicable 90 day period, or (b) the earlier amendment of its company tax return for the purpose of complying with the provision referred to in the notice. (9A) Subsection (9) does not apply to a partial closure notice which does not relate to any matter to which the relevant notice relates. (10) If the relevant notice is given to the company after any enquiries into the return for the period are completed, so far as relating to the matters to which the relevant notice relates, no discovery assessment may be made as regards the chargeable gain to which the notice relates until— (a) the end of the applicable 90 day period, or (b) the earlier amendment of the company tax return for the purpose of complying with the provision referred to in the notice. (11) Subsections (2)(b) and (8) do not prevent a company tax return for a period becoming incorrect if— (a) a relevant notice is given to the company in relation to that period, (b) the return is not amended in accordance with subsection (2)(b) or (8) for the purpose of complying with the provision referred to in the notice, and (c) the return ought to have been so amended. (12) In this section— “the applicable 90 day period”, in relation to a relevant notice, means the period of 90 days beginning with the day on which the notice is given, “closure notice” means a notice under paragraph 32 of Schedule 18 to the Finance Act 1998, “company tax return” means the return required to be delivered pursuant to a notice under paragraph 3 of that Schedule, as read with paragraph 4 of that Schedule, “discovery assessment” means an assessment under paragraph 41 of that Schedule, “notice of enquiry” means a notice under paragraph 24 of that Schedule.

Propose a change

184J Asset subject to EU exit charge on becoming chargeable asset

(1) This section applies if— (a) an asset becomes a chargeable asset in relation to a company by reason of an event specified in subsection (2), and (b) on the occurrence of that event the company becomes subject to an EU exit charge in relation to the asset. (2) The events are— (a) the company becoming resident in the United Kingdom, and (b) in the case of a company that is not resident in the United Kingdom, the asset beginning to be held for the purposes of a trade carried on by the company in the United Kingdom through a permanent establishment. (3) The company is to be treated for the purposes of this Act as if it had acquired the asset for its market value at the time it became a chargeable asset in relation to the company. (4) For the purposes of this section an asset is a “chargeable asset” in relation to a company at any time if any gain on its disposal by the company at that time would be chargeable to corporation tax. (5) “EU exit charge” means a charge to tax under the law of a member State in accordance with Article 5(1) of Directive (EU) 2016/1164 of the European Parliament and of the Council of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market.

Propose a change

185 Deemed disposal of assets on company ceasing to be resident in U.K.

(1) This section applies to a company if, at any time (“the relevant time”), the company ceases to be resident in the United Kingdom. (2) The company shall be deemed for all purposes of this Act— (a) to have disposed of all its assets, other than assets excepted from this subsection by subsection (4) below, immediately before the relevant time; and (b) immediately to have reacquired them, at their market value at that time. (3) Section 152 shall not apply where the company— (a) has disposed of the old assets, or of its interest in those assets, before the relevant time; and (b) acquires the new assets, or its interest in those assets, after that time, unless the new assets are excepted from this subsection by subsection (4) below. (4) If at any time after the relevant time the company carries on a trade in the United Kingdom through a permanent establishment— (a) any assets which, immediately after the relevant time, are situated in the United Kingdom and are used in or for the purposes of the trade, or are used or held for the purposes of the permanent establishment, shall be excepted from subsection (2) above; and (b) any new assets which, after that time, are so situated and are so used or so held shall be excepted from subsection (3) above; and references in this subsection to assets situated in the United Kingdom include references to exploration or exploitation assets and to exploration or exploitation rights. (4A) Subsection (4) applies to an overseas life insurance company in the case of its long-term business with— (a) the omission from paragraph (a) of the words “are situated in the United Kingdom and”; and (b) the omission from paragraph (b) of the words “are so situated and”. (5) In this section— (a) “designated area”, “exploration or exploitation activities” and “exploration or exploitation rights” have the same meanings as in section 276; (b) “exploration or exploitation assets” means assets used or intended for use in connection with exploration or exploitation activities carried on in the United Kingdom or a designated area; (c) “the old assets” and “the new assets” have the same meanings as in section 152; and a company shall not be regarded for the purposes of this section as ceasing to be resident in the United Kingdom by reason only that it ceases to exist.

Propose a change

186 Deemed disposal of assets on company ceasing to be liable to U.K. taxation.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

187 Postponement of charge on deemed disposal under section 185 or 186.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

187A Deemed disposal under section 185: ATED-related gains and losses

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Propose a change

187B Postponing gain or loss under section 185(2): interests in UK land

(1) This section applies if an interest in UK land is deemed to have been disposed of under section 185(2) by a company at any time. (2) The gain or loss that, but for this subsection, would have accrued to the company at that time is not to accrue at that time. (3) But, on a subsequent disposal by the company of the whole or part of the interest in UK land, the whole or a corresponding part of the gain or loss is treated as accruing on the subsequent disposal. (4) This gain or loss is in addition to any gain or loss that actually accrues on the subsequent disposal. (5) A company may elect for a disposal deemed to have been made under section 185(2) to be excluded from the operation of this section. (6) The election must be made within 2 years after the day on which the deemed disposal occurs. (7) In this section “interest in UK land” has the meaning given by section 1C.

Propose a change