Corporation Tax Act 2010 section 676DA

Introduction to Chapter

Section 676DA introduces the rules in Chapter 2D, which deal with situations where a company changes ownership and subsequently realises a gain on an asset that was transferred into the company on a tax-neutral basis within its group.

• The rules apply where there is a change in ownership of a company on or after 1 April 2017, and the company acquires an asset from a fellow group company on a no gain/no loss or tax-neutral basis, and then disposes of that asset at a gain within five years of the ownership change.
• The rules also apply where a chargeable gain on an asset disposal is allocated to the company within five years of the ownership change through an election for notional transfers within a group.
• An asset acquired by the company is treated as the same asset as one it owns at a later date if the later asset's value derives wholly or partly from the original asset — for example, where the company held a leasehold and subsequently acquired the freehold reversion.
• Key defined terms for the chapter include "non-trading chargeable realisation gain" (a chargeable realisation gain on an intangible fixed asset that is a non-trading credit) and "the relevant gain" (being the chargeable gain or non-trading chargeable realisation gain that triggers these provisions).