Taxation of Chargeable Gains Act 1992 section 171

Transfers within a group: general provisions

Section 171 establishes the "no gain/no loss" rule for asset transfers between companies in the same group, ensuring that intra-group disposals do not trigger immediate chargeable gains or allowable losses for corporation tax purposes.

• When one group company transfers an asset to another group company, the transfer is treated as taking place at a value that produces neither a gain nor a loss for the disposing company, provided both companies meet UK residency or chargeable asset conditions.
• The rule requires both a genuine disposal by one group company and a corresponding acquisition by another group company — it does not apply where a deemed disposal occurs without a matching acquisition.
• Numerous exceptions exclude specific types of disposal from the no gain/no loss treatment, including debt repayments, redemption of redeemable shares, and disposals involving investment trusts, venture capital trusts, qualifying friendly societies, UK REITs, and dual resident investing companies.
• The rule is also disapplied where the consideration takes the form of compensation for damage, destruction, or depreciation of assets borne by a non-group party such as an insurer, or where the disposal arises from the exercise of an option granted when the companies were not in the same group.