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D6.450 Scheme of reconstruction involving a transfer of a business

Where a company undertakes a scheme of reconstruction involving a transfer of a business, relief from corporation tax on chargeable gains is given by deeming the business to be sold for such price as gives rise to neither gain nor loss¹. Where a degrouping charge results in additional consideration being deemed to be received, the additional consideration is disregarded for these purposes² (see D2.330).

The transferee company is correspondingly deemed to have acquired the assets when the transferor company acquired them³.

In the case of assets held at 6 April 1965 the transferee company is deemed to have acquired the assets when the transferor company acquired them⁴.

Where the transfer takes place after 31 March 1982 and there has been no previous disposal of the assets (other than at no gain/no loss) since that date, the rebasing rules⁵ will apply if the transferee company subsequently disposes of the assets after 5 April 1988 (other