Taxation of Chargeable Gains Act 1992 section 162B

Disincorporation relief: assets (including pre-FA 2002 goodwill)

Section 162B provides a capital gains tax relief when a company transfers its business to its shareholders, allowing qualifying assets to be transferred at a value that avoids an immediate chargeable gain.

• The relief applies where a company transfers its business to some or all of its shareholders and a claim for disincorporation relief has been made under section 58 of the Finance Act 2013.
• Qualifying assets (goodwill and interests in land not held as trading stock) are deemed to be transferred at the lower of their original allowable cost to the company and their market value, which typically means no chargeable gain arises for the company on the transfer.
• The shareholders who receive the assets are treated as acquiring them at the same deemed value, so they inherit the base cost rather than acquiring at market value.
• Goodwill that falls within section 162C (broadly, goodwill created or acquired on or after 1 April 2002) is excluded from this relief and is dealt with separately under that section.