HMRC internal manual

Capital Gains Manual

Transactions between connected persons


Where the person who acquires an asset is connected with the person making the disposal, see CG14580, they are to be treated as parties to a transaction otherwise than by way of bargain at arm’s length. This brings the market value rule in TCGA92/S17 into operation. In addition TCGA92/S18 provides that any loss on the transaction becomes a ‘clogged loss’.