Corporation Tax Act 2009 section 791

Application of roll-over relief in relation to degrouping charge

Section 791 allows a company that incurs a degrouping charge on an intangible fixed asset to claim roll-over relief where the proceeds are reinvested in another intangible fixed asset.

• When a company leaves a group and triggers a degrouping charge on an intangible fixed asset, the normal roll-over relief rules for reinvestment can still apply, subject to certain modifications.
• For the purposes of the relief, the relevant date is the date the transferee company left the group (or ceased to meet the qualifying condition), not the original intra-group transfer date.
• References to sale proceeds in the roll-over relief rules are replaced by the deemed realisation amount arising from the degrouping charge, and the asset must have been a chargeable intangible asset in the hands of the original transferor company.
• If roll-over relief reduces the deemed realisation amount, this does not change the value at which the company is treated as having reacquired the asset — the reacquisition value remains at full market value.