»Ê¹ÚÌåÓýapp

CTA10/S269DD

TCGA92/S170 defines a group of companies for capital gains purposes. »Ê¹ÚÌåÓýapp rules at TCGA92/S171A allows for the transfer of part or all of a chargeable gain or chargeable loss between companies in the same group.

»Ê¹ÚÌåÓýapp banking surcharge is charged on a banking company’s taxable total profits with certain adjustments (BKM403100). A banking company’s surcharge profits should include all the chargeable gains which arose to that company in the chargeable accounting period but should not include any chargeable gains which arose to a non-banking company. Where chargeable gains arising in a chargeable accounting period have been transferred between a banking and a non-banking company under s171A, adjustments are needed to arrive at the surcharge profits.

A banking company’s taxable total profit for a chargeable accounting period will not include any chargeable gains which arose in that period and were transferred from that company to a non-banking company under a section 171A election. Without the election these chargeable gains would be subject to the surcharge. »Ê¹ÚÌåÓýapp surcharge legislation requires an adjustment to be made to add the total of these relevant transferred-out gains to the taxable total profits for the chargeable accounting period (CTA10/S269DD para 2(a)).

A banking company’s taxable total profit for a chargeable accounting period will include any chargeable gains which arose in that period and were transferred to that company from a non-banking company under a section 171A election. Without the election these chargeable gains would not be subject to the surcharge. »Ê¹ÚÌåÓýapp surcharge legislation requires an adjustment to be made to deduct the total of any non-banking transferred-in gains from the taxable total profits for the chargeable accounting period.

A company is a non-banking company for the purpose of this section (S269DD) if it is a non-banking company when the chargeable gain, or such part of it as the election transfers, is treated as accruing under the s171A election (TCGA1992/S171B(3)).

»Ê¹ÚÌåÓýapp adjustments for transferred-in and transferred out gains works in tandem with the restriction of transferred-in losses from non-banking companies (BKM403650) so groups can continue to use s171A elections to reduce their CT chargeable profits while ensuring that surcharge profits include all the chargeable gains arising to a banking company and exclude any non-banking gains transferred to the banking company.