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HMRC internal manual

Corporate Intangibles Research and Development Manual

HM Revenue & Customs
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Intangible assets: groups: tax-neutral transfers: conditions


Companies affected

Both the companies involved in the transfer of a chargeable intangible asset need to be members of the same group, as defined in CIRD40030 onwards, at the time of the transaction. In addition:

  • neither the transferor nor the transferee must be a qualifying friendly society within the meaning of ICTA88/S461A.
  • the transferee must not be a dual resident investing company within the meaning of ICTA88/S404 (see CTM34560).

These exceptions are made to avoid the risk of exploitation of mismatches between thetax treatment of the two parties.

Assets affected

The asset must be:

  • a ‘chargeable intangible asset’ (see CIRD20035) in the hands of the transferor immediately before the transfer, and
  • a chargeable intangible asset in the hands of the transferee company immediately after the transfer.

Transactions affected

Tax neutral treatment only applies to the transfer of such an asset. Not all transactions realising an asset within the rules described in CIRD13210 onwards involve the transfer of an asset. Depending on the particular facts there may be no transfer of an asset where one company grants another a licence, for example to exploit a patent for a lump sum.