Taxation of Chargeable Gains Act 1992 section 101A

Transfer within group to investment trust

Section 101A prevents a tax-free intra-group asset transfer from sheltering a latent gain where the receiving company subsequently becomes an investment trust (whose gains are not chargeable).

• Where a company receives an asset on a no-gain/no-loss basis under the group transfer rules and later becomes an investment trust within six years, the section triggers a deemed disposal and reacquisition at market value
• The 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
• The section also catches situations where the original asset has been replaced through rollover relief claims or where the value of a later asset derives from the original transferred asset
• HMRC may raise an assessment for corporation tax arising under this section at any time within six years after the end of the accounting period in which the company first becomes an investment trust