Shadow ACT: unrelieved surplus: asset transferred after change in ownership of company
Regulation 18 is modelled on ICTA88/S245B and follows the same approach. It restricts the set off of unrelieved surplus ACT where the company’s capacity after the change in ownership derives wholly or in part from a gain on an asset transferred from another member of the new group.
It applies where:
- there is a change in the ownership of a company,
- after the change the company acquires an asset and TCGA92/S171 (1) applies to the acquisition, and
- a chargeable gain accrues to the company on the disposal of the asset within the period of three years beginning within the change of ownership.
When the conditions are met, the limit on the amount of unrelieved surplus ACT to beset against the company’s liability to CT is reduced by 20% of the chargeable gain.
An acquired asset and the disposed asset are treated as the same asset if the value of the latter is derived in whole or in part from the former (see CTM81230).