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HMRC internal manual

Capital Gains Manual

Depreciatory intra-group dividends: asset retention test

The asset retention test in TCGA92/S31 (7) is that Section 31 applies only where the following conditions are satisfied in the period beginning with the asset transaction and ending immediately before the Section 30 disposal.

  • There has been no actual disposal of the asset which was the subject of the asset transaction, other than a no gain/no loss disposal under TCGA92/S171 (1).
  • There has been no deemed disposal under TCGA92/S178 or TCGA92/S179.

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+.