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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Value shifting: outline for groups: scope of value shifting charge

The following instructions describe the value shifting rules which applied to companies for disposals from 14 March 1989 to 18 July 2011 (see final paragraph below). The provisions are complex and you should seek advice from Capital Gains Technical Group if you consider they may be relevant to a case.

The rules dealt separately with two different types of depreciatory transaction:

  • intra-group dividends: before the disposal the subsidiary paid a dividend out of reserves which were created by the intra-group transfer of an asset at a commercial (book) gain, and the transferred asset left the group at the same time as the shares in the subsidiary, see CG46805 and CG46820,
  • intra-group asset transfers: before the disposal there was an intra-group transfer of an asset at a commercial (book) loss, see CG46880.

Finance Act 2011 introduced a new Targeted Anti-Avoidance Rule for disposals of shares and securities by companies on or after 19 July 2011. See CG48500+.