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HMRC internal manual

Capital Gains Manual

From:
HM Revenue & Customs
Published
12 March 2016
Updated:
22 May 2026 - See all updates

CG14700 - Assets disposed of: series of transactions: groups of companies

Section 19(5) of the Taxation of Chargeable Gains Act (TCGA) 1992

Section 19 TCGA 1992 was not intended to apply to straightforward 'intra-group' transfers so the provisions of section 19 TCGA 1992 are disapplied where the transaction is a disposal between fellow group members within the meaning of section 171 TCGA 1992, see CG45300P.

However, groups of companies could exploit section 19(5) TCGA 1992 in two ways:

  • they could assemble assets in one group member by a series of 'intra-group' transfers and then sell them to a connected person or persons outside the group, see section 20(6) and (7) TCGA 1992.
  • one group member could fragment assets by transfer to other group members before their disposal outside the group to a connected person or persons, see section 19(6) TCGA 1992.


Section 20(6) and (7) TCGA 1992

To prevent the exploitation of the rules in CG14680 where the provisions apply to a disposal which is not an 'intra-group' transfer

  • the first bullet of CG14680 does not apply to acquisitions from fellow group members and
  • for the purposes of the second bullet of CG14680, any disposal by way of an intra-group transfer before the first transaction in the series of linked transactions is assumed to have been made after that transaction.


Section 19(6) TCGA 1992

It would be possible for a group of companies to avoid section 19(1) TCGA 1992: one company could fragment assets and transfer them at no gain/no loss under section 171 TCGA 1992 to other companies in the group before their disposal outside the group to a connected person or persons. Section 19(6) TCGA 1992 counters this kind of avoidance. We treat a disposal by a transferee company (A) as if it had been made by the original transferor company (B) for the purpose of determining whether section 19(1) TCGA 1992 applies. If the application of section 19(1) TCGA 1992 results in an increase in the consideration, this has effect in relation to the disposal made outside the group by the transferee company (A).