This section of the manual describes the rules that apply when one group company transfers goodwill or an intangible asset to another group company. The main features are shown below.
For the purposes of Schedule 29 transfers of intangible assets
between companies that are ‘related parties’ (
CIRD45105 onwards) are normally
regarded as taking place at market value (
CIRD45030). Paragraph 55, however, sets
out a major exception to this rule. It enables a company to
transfer a ‘chargeable intangible asset’ to another
member of the same group on a tax-neutral basis.
CIRD40250 identifies the transactions
to which tax-neutral treatment applies.
CIRD40300 describes what tax-neutral
treatment involves.
CIRD40350 outlines some practical
points.
If a group company transfers an asset on tax-neutral terms, and the recipient company subsequently leaves the group, there may be a deemed realisation that brings back into charge the gain up to the time of the tax-neutral transfer ( CIRD40510).
The transfer of assets between companies that are not in the same group may also attract tax- neutral treatment if the transaction is a part of one of the various types of business reorganisation described in CIRD42000 onwards.
