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No gain – no loss transfers in groups of companies

21 September 2023

Learn about tax-neutral asset transfers within corporate groups under HMRC rules. Discover exceptions and important considerations for efficient tax planning within group companies.

There are special rules concerning the transfer of assets in groups of companies. In most cases, this means that where assets are moved around group companies, there are no immediate capital gains consequences. This effectively allows for a tax neutral, no gain – no loss transfer opportunity.

HMRC’s manuals states that:

This is achieved by fixing both the consideration received for the asset by the transferor. It is also achieved through fixing the consideration given for the asset by the transferee. The transferor has neither chargeable gain nor allowable loss. The transferee effectively takes over the transferor’s capital gains cost, augmented by indexation allowance as appropriate.

The no gain – no loss rule only applies where a member of a group of companies disposes of an asset to another member of the same group. There is a general requirement that there should be a disposal and acquisition by a group company.

The no gain/no loss rule does not apply where a group company makes a deemed disposal of an asset for consideration received from another group company. If the group company paying the consideration does not itself acquire an asset.

There are other specific exceptions that must be considered before relying on the use of no gain – no loss transfers.

Source: HM Revenue & Customs Tue, 19 Sep 2023 00:00:00 +0100

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