Corporation Tax Act 2009 section 825

Application of sections 780 and 785 where transfer within section 824 occurs

Section 825 relaxes the degrouping charge rules for intangible fixed assets when a building society transfers its business to a successor company.

• When a building society transfers its business to a company, the normal degrouping charges on intangible assets (deemed market value disposal and reacquisition) are disapplied for companies leaving the building society's group as a result of the transfer.
• If the building society and successor company are initially in the same group but later separate, no degrouping charge arises on assets previously acquired from the building society or its group members.
• However, if a company that was in the building society's group joins the successor company's group and later leaves that group, the degrouping rules apply as though the asset had originally been acquired from the successor company.
• This deemed acquisition rule does not apply where the company that acquired the asset and the company it acquired it from are 75% subsidiaries of each other, leave the successor company's group at the same time, and remain in the same group as one another.