CIRD40540 - Intangible assets: groups: degrouping: associated companies leaving group: subsequent charge

CTA09/PART8/S783

»Ê¹ÚÌåÓýapp rules here are complex but are modelled on CG provisions that were designed to meet particular avoidance strategies that companies have employed in the past.

»Ê¹ÚÌåÓýappy operate in the following circumstances:

  • a company ceases to be a member of a group of companies (the first group) having acquired an asset from another company which was a member of the first group at the time of acquisition;
  • S783(1) applies in respect of that acquisition when the company leaves the first group, so that there is no degrouping adjustment at that point,
  • the company later ceases to be a member of another group of companies (the second group); and
  • there is a ‘relevant connectionâ€� between the first and second groups (CIRD40545).

In these circumstances, s783(3) deems the asset to have been transferred when both companies were members of the second group, so creating a degrouping adjustment at the time the company leaves the second group.