Taxation of Chargeable Gains Act 1992 section 217C

Subsequent disposal of assets by incorporated society etc.

Section 217C deals with what happens for capital gains purposes when an incorporated friendly society disposes of assets that it originally acquired from the registered society it replaced on incorporation.

• When a registered friendly society incorporates under the Friendly Societies Act 1992, assets transfer to the new incorporated society on a no gain/no loss basis under section 217A(3).
• If the incorporated society later disposes of any of those transferred assets, any capital allowances previously claimed by the old registered society are treated as if they had been claimed by the incorporated society.
• This means the restriction of allowable losses by reference to capital allowances (under section 41) carries across from the old society to the new one, preventing a double tax benefit.
• Where the subsequent disposal falls within a chain of no gain/no loss transfers (section 41(8)), the original transfer from the registered society to the incorporated society is also treated as part of that chain.