CG45402 - Charge on companies leaving groups: when gain or loss accrues

TCGA92/S178 (3) & TCGA92/S178 (10)

The event which triggers a degrouping charge is a company ceasing to be a member of a group. But the amount of the gain (or loss) is determined by reference to a deemed disposal immediately following the acquisition of the asset from another group member, and this may have taken place up to six years previously. Under Section 278 ICTA70, consolidated as TCGA92/S178, the gain accrues in the normal way at the time of the deemed disposal, and forms part of the profits for the accounting period in which the deemed disposal falls. The rules extend the normal time limit for assessments so that an assessment on a gain resulting from a deemed disposal can be made up to six years after the degrouping event which triggers the tax charge.