Corporation tax – Groups and chargeable gains

Partially one of this informative article we reviewed the definitions of a group relief team plus a money gains group.
The remaining elements of this short article analyze tax planning as well as other difficulties associated with funds gains teams. This element appears at transfers at no obtain, no loss and degrouping costs.

Transfers at no attain, no reduction

The transfer of property involving firms within a money gains group at no gain, no loss shouldn’t be viewed as a tax scheduling chance. It is because there isn’t any have to transfer property to be able to realise a chargeable gain or allowable decline on an exterior sale in a specific group company; the get or decline can be transferred to the right team member following the occasion by simply distributing an election (see beneath).
The no gain, no reduction transfer rule enables the administration of a gaggle of firms to execute industrial transactions, for instance, the transfer of an asset, or perhaps a total trade, from one particular corporation to another without having supplying increase to any chargeable gains. Very similar guidelines be certain that no stamp duty or stamp obligation land tax arises on such transfers Despite the fact that, for stamp taxes, the efficient possession necessary in non-right held subsidiaries is 75% versus greater than 50%.

Degrouping costs

If a company, MT Ltd, is to be bought from QR Ltd, a member of a cash gains team, an evaluation needs to be completed in order to discover all no acquire, no reduction transfers to MT Ltd within the 6 years ahead of the purchase. Any these types of transfers will give rise to degrouping expenses if MT Ltd however owns the asset(s) transfer(cessione d’azienda)

A degrouping cost is calculated by managing MT Ltd as possessing bought the asset for its sector benefit as at some time in the no attain, no decline transfer. A chargeable acquire (decreased by indexation allowance up towards the day of your no obtain, no decline transfer) or allowable decline is calculated in the conventional way. This achieve is then extra to (or if a decline, deducted from) the thing to consider received by QR Ltd in respect of the corporate which includes still left the team (MT Ltd). This should have the result of rising the chargeable attain realised by QR Ltd around the sale of MT Ltd (or minimizing it If your asset anxious had fallen in price through the date from the no gain, no decline transfer).
It should be recognised the alter to your consideration acquired by QR Ltd will frequently be irrelevant resulting from the availability of your significant shareholding exemption (SSE). Where by the SSE is obtainable the whole on the chargeable get about the sale of MT Ltd, including the aspect relating to the degrouping demand, might be exempt. Likewise, reduction will be denied for The full of any loss. The SSE is covered in additional detail in the ultimate Portion of this text.


QR Ltd owns one hundred% on the ordinary share capital of quite a few subsidiary providers this sort of that the companies are all users of a capital gains group. The companies get ready accounts to 31 March.
QR Ltd sold MT Ltd, amongst its subsidiaries, for £280,000 on one September 2016. MT Ltd owns an asset that it acquired from An additional enterprise within the group because of a no gain, no loss transfer inside the 6 decades prior to 1 September 2016.
The degrouping cost arising due to MT Ltd leaving the group continues to be calculated as £seventy five,000. This is extra into the thought been given by QR Ltd with the sale of MT Ltd. The result of the is to extend QR Ltd’s attain to the sale of MT Ltd by £seventy five,000. Having said that, If your sizeable shareholding exemption is offered in respect in the sale of MT Ltd, The full with the attain over the sale are going to be exempt.