Revenue Note for Guidance
This section sets out the main provisions for computing gains where an asset, acquired by a member of a group of companies from another group member, is eventually disposed of outside the group. Specific provisions are made for the restriction of losses and the relevant acquisition cost on the disposal of development land after a particular date.
(2)(a) A member of a group disposing of an asset outside the group (in the course of a disposal to which section 617 applies, that is, a transfer of assets, other than trading stock, within a group) is treated as having acquired the asset at the time it was first acquired by the group (that is, as if the actions of the group member were the actions of the entire group), and indexation relief under section 556 applies accordingly.
(1) Where a member of a group of companies disposes of an asset outside the group (in the course of a disposal to which section 617 applies, that is, a transfer of assets, other than trading stock, within a group) the capital allowances to be taken into account for the purposes of restricting losses under section 555 are to include allowances given to other members of the group who had previously owned the asset.
(2)(b) Where development land has been transferred within a group before 24 April, 1992 and is subsequently disposed of outside the group, the disposing member is treated as having acquired the land at the time of actual transfer from the other group member (and not at the time when it was first acquired by the group).
Relevant Date: Finance Act 2021