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HMRC internal manual

Capital Gains Manual

From
HM Revenue & Customs
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Groups: business asset roll-over relief: no-gain/no-loss acquisitions do not qualify for relief

TCGA92/S175 (2C)

TCGA92/S175 (2C) prevents what was known as `rollaround’. Otherwise a trade asset transferred at no gain/no loss from one group company to another could be a new asset for the purpose of a claim to roll-over relief.

The rule will mainly apply to acquisitions from another group member that would be covered by TCGA92/S171 but is not restricted to that particular no gain/no loss provision.

EXAMPLE

Company B, which is a member of the A group, acquired a trade asset X from outside the group in 2010. Also in 2010 company C, also in the A group, sold a trade asset Y. In 2011 trade asset X was transferred at no gain/no loss to company D, also in the A group. The gain made on the disposal of trade asset Y cannot be rolled over against company D’s deemed no gain/no loss acquisition cost.

Note that the rule does not prevent the gain being rolled over against the cost of the original acquisition of asset X by company B.