Corporation Tax Act 2009 section 792

Reallocation of charge within group

Section 792 allows a degrouping charge on intangible fixed assets to be transferred from the company leaving the group to another company that remains in the group.

• When a company (A) leaves a group and a chargeable realisation gain arises on an intangible fixed asset, companies A and B may jointly elect to shift all or part of that gain to B, provided B was a member of the relevant group at the relevant time
• Where A simply leaves a group, the relevant group is the group A was in, and the relevant time is immediately before A's departure; where the principal company of A's group itself becomes part of another group, the relevant group is that second group, and the relevant time is immediately before A ceases to meet the qualifying condition
• The election can cover the whole gain or only a specified part of it, and the gain is then treated as accruing to B rather than A
• This reallocation can be used strategically to shelter the degrouping charge against reliefs available elsewhere in the group, and B may also be able to claim roll-over relief under Chapter 7 in respect of the reallocated gain