Taxation of Chargeable Gains Act 1992 section 217D

Disposal of assets on union, amalgamation or transfer of engagements

Section 217D provides that when co-operative societies and similar bodies merge, amalgamate, or transfer engagements, any asset transfers between them are treated on a no gain/no loss basis for corporation tax on chargeable gains.

• When two or more co-operative or community benefit societies (or similar bodies) merge, amalgamate, or transfer engagements, any assets passing between them are treated as transferred at a value that produces neither a chargeable gain nor an allowable loss for the disposing body.
• The acquiring body is treated as having acquired the asset at the same no gain/no loss amount, effectively stepping into the shoes of the disposing body for future capital gains purposes.
• The relief applies to registered co-operative and community benefit societies, Northern Ireland industrial and provident societies, credit unions registered in Northern Ireland, European Co-operative Societies (SCEs), and UK agricultural or fishing co-operatives.
• The effect is to defer any chargeable gain or loss until the acquiring body eventually disposes of the asset to a party outside the scope of this relief.