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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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Groups: business asset roll-over relief: the same person rule (1), the general rule

The single group trade means that it is possible for one group company to qualify for relief when it disposes of or acquires an asset used for another group company’s trade. The same person rule makes it possible for one group company to make the disposal and another the acquisition.

TCGA92/S175(2A) treats two members of a group of companies as the same person for the purposes of a roll-over relief claim. Where:

  • the disposal is by a company which at the time of the disposal is a member of a group of companies, and
  • the acquisition is by another company which at the time of the acquisition is a member of the same group,
  • the conditions in TCGA92/S175 (2AA) are met, and
  • the claim is made by both companies.

The conditions in TCGA92/S175 (2AA) for both disposing and acquiring company are that they are resident in the UK, or that the assets are chargeable assets (see CG45310) in relation to that company, immediately before the time of the disposal in the case of the disposing company, or immediately after the time of the acquisition in the case of the acquiring company.

See CG45357 for guidance on which companies need to make the joint claim to roll-over relief where the chargeable gain is transferred under TCGA92/S171A.

EXAMPLE

Company A which is a member of a group disposes of a trade asset to a person who is not a member of the group. In the following year, company B, which is a member of the same group as A, acquires a trade asset from a person who is not a member of the group. If all other conditions for relief are satisfied, companies A and B can claim to roll-over company A’s gain against company B’s acquisition cost. It is not necessary that there should be any transfer of funds between A and B.