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HMRC internal manual

Capital Gains Manual

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

The rule applies where a company disposes of an asset acquired at no gain/no loss under TCGA92/S171 on or after 6 April 1988. An election out of the kink test by the company making that disposal does not cover the disposal. Instead the disposal is covered by the election (if there is one) by the company from which the asset was acquired at no gain/no loss. But this does not apply if there was a previous no gain/no loss disposal on or after 6 April 1988. In that case the election out of the kink test (if there is one) which applies to the disposal is that made by

  • the last company acquiring the asset after 5 April 1988 other than at no gain/no loss
  • or, if there is no such company, the company which held the asset on 5 April 1988.

See also CG46360+ concerning elections in respect of group companies.