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HMRC internal manual

Corporate Intangibles Research and Development Manual

Intangible assets: groups: significance of

Why does it matter if there is a group relationship?

Whether there is a group relationship affects a number of other provisions. In particular:

  • transfers of chargeable intangible assets (CIRD20035) between group members generally take place on a tax-neutral basis (CIRD40200);
  • as a consequence there is a ‘degrouping’ adjustment on a company leaving a group while holding an asset that has been transferred to it on tax-neutral terms (CIRD40500);
  • a taxable credit on degrouping can be reallocated between group members (CIRD40705);
  • in certain circumstances unpaid tax arising from a degrouping charge can be recovered from (principally) some other group members (CIRD40720),
  • expenditure on new assets by other group members may count for reinvestment relief (CIRD20400); and
  • reinvestment relief may also be available when the reinvestment takes the form of shares in another company that becomes a group member as a result (CIRD20420).