Corporation Tax Act 2009

Roll-over relief for disposals of pre-FA 2002 assets

898 Relief where assets disposed of on or after 1 April 2002

(1) This section applies if a company disposes of a pre-FA 2002 asset on or after 1 April 2002.

(2) Chapter 7 (roll-over relief in case of realisation and reinvestment) applies as if—

(a) references to the realisation of the old asset were references to its disposal,

(b) references to its being a chargeable intangible asset were references to its being a chargeable asset within TCGA 1992 (see section 900),

(c) references to the proceeds of its realisation were references to the net proceeds of disposal under that Act (see subsection (3)), and

(d) references to its cost recognised for tax purposes were references to the cost under that Act (see subsection (4)).

(3) For the purposes of subsection (2)(c) the net proceeds of disposal under TCGA 1992 are taken to be the amount or value of the consideration for the disposal, less any incidental costs of making the disposal that would be allowable as a deduction under section 38(1)(c) of that Act.

(4) For the purposes of subsection (2)(d) the cost under TCGA 1992 is taken to be an amount equal to the difference between—

(a) the net proceeds of disposal (as defined in subsection (3)), and

(b) the amount of the chargeable gain on the disposal.

(5) Section 850 (part realisation involving related party acquisition: exclusion of roll-over relief) does not apply in a case where Chapter 7 applies because of this section.

(6) References in this section to the disposal of an asset have the same meaning as in TCGA 1992.

899 Relief where degrouping charge on asset arises on or after 1 April 2002

(1) This section applies if—

(a) a company is treated under section 179(3) or (6) of TCGA 1992 (degrouping charge) as having sold and reacquired a pre-FA 2002 asset, and

(b) under section 179(4) or (8) of that Act the gain is treated as accruing on or after 1 April 2002.

(2) Chapter 7 (roll-over relief in case of realisation and reinvestment) applies as specified in section 898(2) and with the additional modifications specified in subsections (3) to (5).

(3) In section 755 (conditions relating to the old asset and its realisation), for the references to the old asset being a chargeable intangible asset throughout the period during which it was held by the company substitute references to its being a chargeable asset within TCGA 1992 throughout the period during which it was held by the company referred to in section 179 of that Act as “company B”.

(4) In section 756(1) (conditions relating to expenditure on other assets), for the references to the date of realisation of the old asset substitute references—

(a) in a case within section 179(3) of TCGA 1992, to the time at which the gain is treated as accruing under section 179(4) of that Act, and

(b) in a case within subsection 179(6) of that Act, to the time at which the gain is treated as accruing under section 179(8) of that Act.

(5) For references to the proceeds of realisation substitute references to the amount of the consideration for which the company is treated under TCGA 1992 as having sold and reacquired the asset.

(6) For the meaning of “chargeable asset within TCGA 1992”, see section 900.

(7) Section 850 (part realisation involving related party: exclusion of roll-over relief) does not apply in a case where Chapter 7 applies because of this section.

900 Meaning of “chargeable asset within TCGA” in sections 898 and 899

(1) For the purposes of sections 898 and 899 an asset is a chargeable asset within TCGA 1992 in relation to a company at any time if—

(a) any gain accruing to the company on the disposal of it at that time would be a chargeable gain within the meaning of that Act,

(b) condition A or condition B is met in relation to the company, and

(c) double tax relief is not available to the company at that time.

(2) Condition A is that at that time the company is UK resident or ordinarily UK resident.

(3) Condition B is that the gain would form part of the company’s chargeable profits for corporation tax purposes as a result of section 10B of TCGA 1992 (non-resident company with United Kingdom permanent establishment).

(4) For the purposes of subsection (1) double tax relief is available to the company if it would be treated for the purposes of any double taxation relief arrangements as not liable in the United Kingdom to tax on any gain accruing to it on a disposal of the asset.

(5) References in this section to the disposal of an asset have the same meaning as in TCGA 1992.