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HMRC internal manual

Corporate Intangibles Research and Development Manual

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HM Revenue & Customs
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Intangible assets: company reorganisations: transfer of business without consideration: general

FA02/SCH29/PARA84

Introduction

Paragraph 84 corresponds to TCGA92/S139 (see CG52800 onwards), and applies where:

  • there has been a transfer of a chargeable intangible asset (CIRD20035) as part of the transfer of the whole or part of a business from one company to another, and
  • the transferor receives no consideration apart from the assumption of liabilities of the business by the transferee. (Typically the consideration will go instead to the shareholders of the transferor by way of the shares in the transferee).

Priority of intra-group transfer rule

Any such transfer of assets should first be examined to see if it falls within the rules for intra- group transfers. If it does then tax neutral treatment is available by virtue of CIRD40220 and paragraph 84 is of no application.

Outline

If the transfer remains within paragraph 84, then a transfer of chargeable intangible assets may still take place on tax neutral terms (as explained in CIRD40300) but is subject to the requirement that it must have been undertaken for a bona fide commercial purpose. This, and the other conditions that need to be satisfied are described in more detail in CIRD42025.