Corporation Tax Act 2009 section 775

Transfers within a group

Section 775 allows intangible fixed assets to be transferred between companies in the same group on a tax-neutral basis, so that no taxable gain or loss arises on the transfer.

• Transfers of intangible fixed assets between members of the same group are tax-neutral, provided the asset qualifies as a chargeable intangible asset for both the transferring and receiving company immediately before and after the transfer
• Without this relief, intra-group transfers would be treated as taking place at market value (as transactions between related parties), triggering taxable gains or losses under the normal realisation rules
• The transfer pricing rules (Part 4 of TIOPA 2010, dealing with provisions not at arm's length) do not apply to transfers that qualify for this group relief
• Tax-neutral treatment is not available where either company is an incorporated friendly society entitled to tax exemption, where the receiving company is a dual resident investing company, or where the transferring company has elected for foreign permanent establishment exemption and the asset was held for the purposes of an overseas branch