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HMRC internal manual

Capital Gains Manual

Depreciatory intra-group asset transfers: part-disposals

TCGA92/S32 (4)

Where part of an underlying asset is disposed of by one group company to another it is necessary to apportion the cost of that asset under TCGA92/S32 (4) to establish whether Section 32 applies. Where an allocation of the cost of the asset between the part disposed of and the part retained has been properly made in accordance with accepted accountancy principles in the vendor company’s books, that allocation should be followed. In other cases the allocation is to be made on a just and reasonable basis.

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+.