CG45300 - Group asset transfers: no gain/loss disposals: outline

The instructions in CG45305+ describe the rules which apply when one group company disposes of an asset to another group company, or when a company leaves a group. The main features are as follows.

• Before 1 April 2000, a company could normally dispose of an asset to another member of the same group on a no gain/no loss basis for capital gains purposes. The result was that the gain attributable to the period of ownership by the group did not become chargeable until the asset finally left the group. Because only companies resident in the UK could be members of a group, an asset used or held for the purposes of the trade of a UK branch or agency of a non-resident company could not be transferred at no gain/no loss.
• From 1 April 2000, a group can include companies which are not resident in the UK (FA2000/SCH29/PARA1). A company can normally transfer an asset to another member of the same group on a no gain/no loss basis for capital gains purposes, provided the asset is within the charge to corporation tax on chargeablegains immediately before and after the transfer, see CG45301. Provided this condition is satisfied, a company which is not resident in the UK but trades through a UK branch or agency can be a party to a no gain/no loss transfer.
• If a group company disposes of an asset at no gain/no loss, and the recipient company subsequently leaves the group, there may be a deemed disposal which brings back into charge the gain up to the time of the no gain/no loss disposal.