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HMRC internal manual

Capital Gains Manual

Value shifting: relevant assets: depreciatory transactions legislation

TCGA92/S30 (2)

FA89/S135(1) corrected a defect in the value shifting rules in CGTA79/S26 (now TCGA92/S30). Before FA89 it was possible to avoid a value shifting charge by stripping value from a subsidiary, transferring the depreciated subsidiary at market value to another group company (at no gain/no loss for tax purposes), and then selling the shares in that other company. CGTA79/S26 did not apply in these circumstances because the asset disposed of (the shareholding in the interposed company) had not itself been reduced in value.

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+.