Section 676DA — Corporation Tax Act 2010: Introduction to Chapter

Introduction to Chapter 676DA 1 This section applies if—

a there is a change in the ownership of a company (“ the company ”) on or after 1 April 2017, and b the following are met— conditions 1 and 2, or condition 3.

2 Condition 1 is that after the change in ownership the company acquires an asset from another company in circumstances such that—

a section 171 of TCGA 1992 (no gain/no loss transfer within a group), or b section 775 of CTA 2009 (tax-neutral transfer within a group), applies to the acquisition.

3 Condition 2 is that—

a in a case within subsection (2)(a), a chargeable gain accrues to the company on a disposal of the asset within the period of 5 years beginning with the change in ownership, or b in a case within subsection (2)(b), there is a non-trading chargeable realisation gain on the realisation of the asset within that period.

4 Condition 3 is that a chargeable gain on a disposal of an asset within the period of 5 years beginning immediately after the change in ownership (or an amount of such a gain) is treated as accruing to the company by virtue of an election under section 171A of TCGA 1992 (notional transfers within a group). (Accordingly, references in this Chapter to the accrual of a relevant gain are to be read in the light of section 171B(2) and (3) of TCGA 1992.) 5 For the purposes of subsection (3), an asset (P) acquired by the company as mentioned in subsection (2) is treated as the same as an asset (Q) owned at a later time by the company if the value of Q is derived in whole or in part from P.

6 In particular, P is treated as the same as Q for those purposes if—

a Q is a freehold, b P was a leasehold, and c the lessee has acquired the reversion.

7 In this Chapter “ the change in ownership ” means the change in ownership mentioned in subsection (1), “ the company ” has the same meaning as in this section, “ non-trading chargeable realisation gain ” means a chargeable realisation gain (within the meaning of Part 8 of CTA 2009 (intangible fixed assets)) which is a non-trading credit for the purposes of that Part (see section 746 of that Act), “ realisation ” has the meaning given by section 734 of CTA 2009, and “ the relevant gain ” means the gain (or amount of a gain) within subsection (3)(a) or (b) or (4).