Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

Oil Taxation Manual

From
HM Revenue & Customs
Updated
, see all updates

Capital gains: non residents: intra-group transfers

TCGA92\S276(8) allows the no gain/no loss provisions of TCGA92\S171 to TCGA92\S174 (transactions within groups), to apply to certain transfers of exploration or exploitation rights or assets by a company resident in a territory outside the UK. It does this by disapplying the UK residence condition for group members at TCGA92\S170.

Transfers qualify only where they are to a fellow 75% group member either resident in the same territory outside the UK or resident in the UK. This preserves a CG charge where the rights/assets are transferred to companies in other territories where there would be Double Taxation Treaty protection on future gains.

TCGA92\S179 and TCGA92\S181 (deferred gains charge on companies leaving a group) are also applied where the receiving company leaves the group within six years of the asset transfer.

The benefit of TCGA92\S276(8) is not generally available to dual resident companies. But this a difficult area and those dual resident companies who wish to have certainty regarding the tax treatment of any disposals prima facie within the TCGA92\S276 charge should approach the Customer Relationship Manager (CRM) where the business is a Large Business customer; or for other cases the HMRC Clearances Team, Alexander House, 21 Victoria Avenue, Southend on Sea, Essex SS99 1BD.

From 1 April 2000, a company can be a member of a group regardless of where it is resident. However the restriction imposed by TCGA92\S276(8) regarding residence has been preserved for oil companies because of the special treaty conditions which usually apply to offshore activities and which would afford treaty protection from the application of the section.