Taxation of Chargeable Gains Act 1992 section 101

Transfer of company's assets to investment trust

Section 101 deals with the capital gains tax consequences when assets originally transferred to a company under a business reconstruction relief are still held when that company later becomes an investment trust.

• Where a company received business assets under section 139 reconstruction relief and later becomes an investment trust while still holding those assets, it is treated as having sold and reacquired them at market value immediately after the original transfer
• Any resulting chargeable gain or allowable loss is treated as arising immediately before the end of the last accounting period prior to the one in which the company becomes an investment trust
• This section does not apply if a deemed disposal and reacquisition has already been triggered under section 101B(1) in connection with the company becoming a venture capital trust
• HMRC may raise an assessment under this section within six years of the relevant accounting period, and all necessary recomputations of tax liability on other disposals must also be carried out