CG46330 - Groups: rebasing: no gain/no loss disposals: elections out of kink test

TCGA92/SCH3/PARA2

It is possible to have a group in which some companies are covered by an election outof the kink test and others are not. Without a special rule it would be possible for groups to exploit this situation, for example, by transferring an asset from a companywithout an election to a company with an election as a preliminary to a disposal to anunconnected third party. The rule which counters this is TCGA92/SCH3/PARA2.

The rule only applies to disposals at no gain/no loss under TCGA92/S171 (1) (intra-group asset transfers, see CG45305+), see CG46331 for detail of how the rule operates.