OpenLegislation

Section 857 Deemed market value or arm’s length acquisition: adjustment where nil or negligible accounting valueF4F5

(1)

This section applies if—

(a)

a company is treated for the purposes of this Part as acquiring an asset at market value F1or by reference to the arm’s length provision, but

(b)

the accounting value of the asset transferred is nil F2, or a negligible value, in the hands of the transferee.

(2)

In such a case any reference in this Part to—

(a)

the cost of the asset recognised for accounting purposes,

(b)

the accounting value of the asset, or

(c)

any loss recognised for accounting purposes in respect of capitalised expenditure on the asset,

is a reference to the cost, value or loss that would have been recognised if the asset had been acquired at market value F3or (as the case may be) by reference to the arm’s length provision.

(3)

If the asset is revalued, the revaluation is ignored.

(4)

In this section “revaluation” has the same meaning as in section 723 (see subsection (5) of that section) and “revalued” must be read accordingly.

Annotations

Textual amendments

F1

Words in s. 857(1)(a) inserted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 2026 (c. 11), Sch. 6 paras. 27(3)(a), 28

F2

Words in s. 857(1)(b) inserted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 2026 (c. 11), Sch. 6 paras. 27(3)(b), 28

F3

Words in s. 857(2) inserted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 2026 (c. 11), Sch. 6 paras. 27(4), 28

F4

Words in s. 857 heading inserted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 2026 (c. 11), Sch. 6 paras. 27(2)(a), 28

F5

Words in s. 857 heading inserted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 2026 (c. 11), Sch. 6 paras. 27(2)(b), 28

Notes on Part 8

Modifications

C1

Pt. 8 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 6(1)

C2

Pt. 8 modified (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), ss. 601, 1184(1) (with Sch. 2)

C3

Pt. 8 modified (1.10.2011) by Postal Services Act 2011 (c. 5), s. 93(2)(3), Sch. 2 para. 6(1); S.I. 2011/2329, art. 3

C4

Pt. 8 modified (15.11.2011 for specified purposes, 30.3.2012 for E.W.) by Localism Act 2011 (c. 20), ss., 240(5)(o), Sch. 24 para. 1(3); S.I. 2012/628, art. 3(b)

C5

Pt. 8 modified (1.4.2012) by Budget Responsibility and National Audit Act 2011 (c. 4), s. 29, Sch. 4 para. 3(1); S.I. 2011/2576, art. 5

C6

Pt. 8 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)

C7

Pt. 8 modified (6.4.2020) by Finance Act 2019 (c. 1), Sch. 5 paras. 35, 45 (with Sch. 5 para. 36)

Notes on Chapter 14

Modifications

C1

Pt. 8 modified (with effect in accordance with s. 148 of the amending Act) by Finance Act 2012 (c. 14), s. 88(1)(2)(7) (with s. 147, Sch. 17)