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HMRC internal manual

Capital Gains Manual

Value shifting: outline for groups: scope of value shifting charge

The value shifting provisions for companies

  • increase the consideration received for the disposal of shares in another company
  • where a scheme or arrangements has stripped value out of that other company, or out of assets (including shares) which that other company holds directly or indirectly.

The provisions can restrict a loss, or create or augment a gain. They will apply most frequently when a company disposes of a subsidiary, but are not restricted to disposals of subsidiaries. For example, a company might dispose of its shares in a subsidiary in stages. Even though the parent/subsidiary relationship no longer exists when the last block of shares is sold, the value shifting provisions for companies may still apply. For convenience these instructions are generally in terms of disposals of subsidiaries. You should bear in mind that the provisions also cover other disposals which meet the detailed statutory conditions.

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+.