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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Depreciatory intra-group asset transfers: asset identity rule


TCGA92/S32 is concerned with transfers within groups at artificial values. Where such a transaction gives rise to a capital loss, the depreciatory transactions provisions in TCGA92/S176, see CG46500+, may apply to restrict or eliminate the loss. But these provisions cannot create or augment a gain. Where one company disposes of shares in another company, and the conditions of Section 32 are satisfied in relation to a disposal of an underlying asset by the second company, the consideration for the share disposal can be increased under Section 30.

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+.