Corporation Tax Act 2009 section 849

Transfers involving gifts of business assets

Section 849 modifies the market value rule for intangible fixed asset transfers between related parties when the transfer qualifies as a gift of a business asset under the capital gains tax gift relief rules.

• When an intangible fixed asset is transferred to a related party company and the transferor claims capital gains gift relief, the normal market value rule is adjusted
• Instead of treating the transfer at full market value, it is treated as being at market value minus the gift relief reduction amount
• This ensures the intangible assets rules and the capital gains gift relief provisions work together consistently
• HMRC may make any necessary adjustments by assessment or amendment of returns, even if normal time limits have expired