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