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HMRC internal manual

Company Taxation Manual

Corporation Tax: loss buying: assets transferred between companies: assets treated as transferred

CTA10/S676BA, S676DA

Under CTA10/PART14/CH2B and CH2D, asset, Q is treated as if it were the same as another asset, P if:

· Asset P was transferred to the company in one of the situations covered by Chapters 2B and 2D, and
· Asset Q derives its value wholly or partly from asset P.

This means that if the company realises a gain on disposal of asset Q, the disposal may be subject to the restrictions in Chapters 2B and 2D. It does not matter that asset Q was not itself transferred to the company because asset Q’s value is derived from asset P.

The legislation specifies that this will apply in particular if:

· Asset Q is a freehold,

· P was a leasehold, and

· The company, as lessee, has acquired the reversion.