Budget 2009 – Groups – Reallocation of chargeable gains
New legislation will be introduced in Finance Bill 2009 to make it easier for group companies to offset gains and losses on disposals of chargeable assets. Currently the provisions only apply to disposals to a third party.
Instead of deeming a transfer of an asset from one group company to another before the disposal, these changes (to section 171A, TCGA) will enable the disposing company and another in the group to jointly elect which of them is deemed to realise the loss. This facility is also being extended to when one group company makes a negligible value claim.
The former restrictions on the type of asset disposed of and the circumstances under which the gain or loss takes place will no longer apply.
This new measure will be applicable for gains and losses arising on or after the date that the Finance Bill 2009 receives Royal Assent.