Taxation of Chargeable Gains Act 1992 section 184E

Sections 184A and 184B: "pre-change assets": basic rules

Section 184E sets out the rules for determining when an asset retains or loses its status as a "pre-change asset" for the purposes of the anti-avoidance rules in sections 184A and 184B, and how that status tracks through to replacement or successor assets.

• An asset loses its pre-change status when it is disposed of outside the group (i.e. not via a tax-neutral intra-group transfer), unless the disposing company retains a partial interest, in which case that retained interest remains a pre-change asset
• New assets whose value derives from a pre-change asset — including through mergers, divisions, share reorganisations, reconstructions, or the creation of new rights — are themselves treated as pre-change assets
• Where a gain or loss on a pre-change asset is deferred under specified rollover or deferral reliefs (such as business asset rollover relief, reconstruction relief, or migration postponement), the deferred gain or loss retains its pre-change character when it is eventually recognised
• To prevent avoidance, where a pre-change asset is transferred to another company under a business reconstruction, EU merger, or similar relief in connection with the tax avoidance arrangements, the asset keeps its pre-change status in the hands of the receiving company