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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Value shifting: outline of rules for groups: relevant assets

For disposals before 14 March 1989, the value shifting rules applied only where the scheme or arrangements reduced the value of the asset disposed of. In relation to the disposal of shares in a subsidiary, it was possible to avoid the value shifting charge by interposing a new group company between the parent making the disposal and the depreciated subsidiary. The parent could then dispose of its interest in the depreciated subsidiary by selling the shares in the interposed company. Since these shares had not themselves been depreciated there would be no value shifting charge. FA89/S135 (1) blocked this loophole by extending the value shifting rules to cover the reduction in value of any `relevant asset’ in addition to the asset disposed of, see CG46920+.

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+.