Corporation Tax Act 2009 section 780

Deemed realisation and reacquisition at market value

Section 780 deals with the degrouping charge that arises when a company leaves a group within 6 years of receiving an intangible fixed asset from another group member on a tax-neutral basis.

• When a company receives an intangible fixed asset from a fellow group member and then leaves the group within 6 years, a degrouping charge is triggered
• The leaving company is treated as if it had sold and immediately rebought the asset at market value at the time it originally received the asset
• Any resulting net credit or debit for the period between the original transfer and the date of leaving the group is brought into account immediately before the company leaves
• Several exceptions apply, including where the departure results from a genuine commercially motivated merger, an exempt distribution, or certain other corporate restructuring events