½Û×ÓÊÓƵ

Intra group transfer of assets before asset sale outside the group

A transfer of a capital asset between two companies which are members of a group is deemed to take place at a consideration such that neither a gain nor a loss arises¹. In other words, the consideration is deemed to be the acquisition cost by the original group purchaser and if that acquisition was before 1 January 2018 indexation allowance to the date of the intra-group transaction or to 31 December 2017, if earlier (see C2.301). The actual consideration payable by the transferee is ignored for tax purposes.

A chargeable gain is crystallised only when an asset is transferred outside the group. The chargeable gain is crystallised in the hands of the company which actually transfers the asset outside the group. The gain or loss is calculated by deducting the cost at which the asset was first acquired by the group plus indexation allowance (if relevant) from the disposal proceeds.

Example

Company A and Company B form a group