Taxation of Chargeable Gains Act 1992 section 171A

Election to reallocate gain or loss to another member of the group

Section 171A allows two companies within the same group to jointly elect to transfer a chargeable gain or allowable loss from one company to the other, subject to certain conditions and time limits.

• Where a chargeable gain or allowable loss arises to a group company, it and another group member may jointly elect to transfer all or part of that gain or loss between them, provided a no-gain, no-loss intra-group transfer of the asset would have been possible immediately before the gain or loss arose.
• The election must be notified to HMRC no later than two years after the end of the accounting period of the company to which the gain or loss originally accrued.
• Elections cannot collectively reallocate more than the total amount of the original gain or loss, and a ring fence chargeable gain from an oil-related trade cannot be transferred to a company that does not carry on a ring fence trade.
• Where a non-UK-resident company is involved, it must either be UK resident or trading in the UK through a permanent establishment, or the asset must be a chargeable asset in relation to that company, for the election to be available.