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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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Groups: business asset roll-over relief: depreciating assets

TCGA92/S175 (3)

TCGA92/S154 modifies the business asset roll-over relief rules where the new asset is a depreciating asset, see CG60370+. TCGA92/S175 (3) extends the provisions concerning depreciating assets in relation to groups of companies. Where the company making the claim is a member of a group Section 154(2) applies as if all members of the group for the time being were the same person, and as if all trades carried on by group members were the same trade in accordance with Section 175(1). This is subject to the restriction of the single trade to trades whose profits are within the scope of the charge to corporation tax, see CG45932. The effect of Section 175(3) is to prevent a held-over gain crystallising in the following cases.

  • There is an intra-group disposal of the depreciating asset.
  • The company which owns the depreciating asset ceases to trade, provided that the owner remains in the group and the asset continues to be used only for the purposes of a trade carried on by a member of the group whose profits are within the scope of the charge to corporation tax, see CG45932.

The held-over gain crystallises on the earliest of

  • a disposal outside the group
  • cessation of use by any and every group member for the purposes of the single group trade (including the case where the owner leaves the group)
  • the expiry of ten years after the acquisition of the depreciating asset.

The gain is chargeable on the company which owns the asset at the time of the relevant event.