Section 273 Transfers within a group.C8C1C2C3C4C5C6C7
United Kingdom
Notwithstanding any provision in F1the Capital Gains Tax Act 1979 fixing the amount of the consideration deemed to be received on a disposal or given on an acquisition, where a member of a group of companies disposes of an asset to another member of the group, both members shall, except as provided by subsections (2) and (3) below, be treated, so far as relates to corporation tax on chargeable gains, as if the asset required by the member to whom the disposal is made were acquired for a consideration of such amount as would secure that on the other’s disposal neither a gain nor a loss would accrue to that other; but where it is assumed for any purpose that a member of a group of companies has sold or acquired an asset, it shall be assumed also that it was not a sale to or acquisition from another member of the group.
Subsection (1) above shall not apply where the disposal is—
a disposal of a debt due from a member of a group of companies effected by satisfying the debt or part of it; or
a disposal of redeemable shares in a company on the occasion of their redemption; F2or
a disposal to a dual resident investing company, within the meaning of section 404 of the Taxes Act 1988F5or
a disposal to a company which, though resident in the United Kingdom,—
is regarded for the purposes of any double taxation arrangements having effect by virtue of section 788 of the Taxes Act 1988 as resident in a territory outside the United Kingdom, and
by virtue of the arrangements would not be liable in the United Kingdom to tax on a gain arising on a disposal of the asset occurring immediately after its acquisition.
and the reference in that subsection to a member of a group of companies disposing of an asset shall not apply to anything which under F6section 72 of the Capital Gains Tax Act 1979 is to be treated as a disposal of an interest in shares in a company in consideration for a capital distribution (as defined in that section) from that company, whether or not involving a reduction of capital.
Subsection (1) above shall not apply to a transaction treated by virtue of sections 78 and 85 of the Capital Gains Tax Act 1979 as not involving a disposal by the company first mentioned in that subsection.
For the purposes of subsection (1) above, so far as the consideration for the disposal consists of money or money’s worth by way of compensation for any kind of damage or injury to assets, or for the destruction or dissipation of assets or for anything which depreciates or might depreciate an asset, the disposal shall be treated as being to the person who, whether as an insurer or otherwise, ultimately bears the burden of furnishing that consideration.
Annotations
Textual amendments
- F1
Words substituted by Capital Gains Tax Act 1979 (c. 14, SIF 63:2), s. 157(2), Sch. 7 para. 8 for 1979-80 et seq.
- F2
S. 273(2)(c) and word “or" immediately preceding it inserted by Finance Act 1980 (c. 48), s. 81(4) in relation to disposals after March 31st 1980.
- F3
Words substituted by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), Sch. 29 para. 32.
- F4
S. 273(2)(d) and word “or" immediately preceding it inserted by Finance (No. 2) Act 1987 (c. 51), s. 64(3) in relation to disposals on or after April 1st 1987.
- F5
S. 273(2)(e) and word “or" immediately preceding it inserted by Finance Act 1990 (c. 29), s. 65(2)(4) in relation to disposals on or after March 20th 1990.
- F6
Words substituted by Capital Gains Tax Act 1979 (c. 14, SIF 63:2), s. 157(2), Sch. 7 para. 9 for 1979-80 et seq.
- F7
S. 273(2A) inserted by Finance Act 1988 (c. 39, SIF 63:1, 2), s. 115 on or after March 15th 1988.
Modifications
- C1
See Finance Act 1974 (c. 30), s. 39(5), Sch. 5 para. 5, where s. 273 applies to a disposal consideration therefor to be disregarded for purposes of s. 39 of the 1974 Act (development gains; small disposals); Capital Gains Tax Act 1979 (c. 14, SIF 63:2), s. 16, ss. 273 to 275 and 276(1) to apply in relation to non-resident companies which are members of a non-resident group and s. 26 of the Act of 197 disposals within this section excluded from s. 43 valueshifting schemes.
- C2
See Capital Gains Tax Act 1979 (c. 14, SIF 63:2), s. 28, Sch. 5 para. 4(3) election under para. 4 (quoted securities held on April 6th 1965) not to cover quoted securities to which s. 273 applies unless company making original disposal makes election covering securities of that kind; s. 75(4) of the Act of 1979 s. 75 (transfers at under-value) not to apply where transfer is a disposal within s. 273 and s. 35(5) of the Act of 1979 apportionment of deductible expenditure on aprt disposal declared to operate before and without regard to s. 273 and s. 84 of the Act of 1979 treatment of gilt-edged securities exchanged for shares compulsorily acquired after April 6th 1976.
- C3
See Capital Gains Tax Act 1979 (c. 14, SIF 63:2), s. 87(4), recovery of tax assessed to withdraw roll-over relief; s. 107 of the Act of 1979 part disposals of land and Finance Act 1982 (c. 39), s. 86, Sch. 13 para. 3(3), calculation of indexation allowance where initial allowance is within this section.
- C4
See Finance Act 1983 (c. 28), s. 34, Sch. 6 para. 9(1), calculation of indexation allowance where election for pooling made and where disposal is within this section and Finance Act 1988 (c. 39, SIF 63:1, 2), Sch. 11 para. 5, indexation: groups and associated companies.
- C5
See Finance Act 1988 (c. 39, SIF 63:1, 2), Sch. 8 paras. 1, 2 of the capital gains tax rebasing to 1982 and Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 440(3)— ss. 273, 274 not to apply to disposals or acquisitions of life assurance companies.
- C6
Ss. 272-281: definition of "effective 51 percent. subsidiary" applied (E.W.S.) by Ports Act 1991 (c. 52, SIF 58), s. 17(13)
- C7
S. 273 applied (with modifications) (16.1.1992) for certain purposes by S.I 1992/58, art.33.
- C8
See Income and Corporation Taxes Act 1970 (c. 10, SIF 63:1), s. 268A(6) postponement of charge on transfer of assets to non-resident company; Finance Act 1970 (c. 24, SIF 63:1, 2), s. 16(4), Sch. 3 para. 8(1) assets transferred from the London Transport Board to the London Transport Executive or London Country Bus Services Ltd and Finance Act 1973 (c. 51), s. 38(5) application of ss. 273 to 275 and 278 to 279 in relation to certain disposals by non-resident companies of offshore exploration or exploitation rights.
Notes on the whole Act
Textual amendments
- F1
Act repealed (in relation to Tax for the year 1992/93 and subsequent years as mentioned in s. 289 of the repealing Act) by Taxation of Chargeable Gains Act 1992 (c. 12), s. 290(3), Sch. 11 para. 24(1), Sch.12 (with savings in ss. 201(3), 290, Sch. 11 paras. 22, 26(2), 27), subject to applications, powers and amendments in the following enactments: Social Security Contributions and Benefits Act 1992 (c. 4), s. 16(1)(3), Sch. 2; Social Security (Consequential Provisions) Act 1992 (c. 6), s. 5, Sch. 3 Pt. II para. 15; Taxation of Chargeable Gains Act 1992 (c. 12), ss. 1(2), 209(3); Finance (No. 2) Act 1992, ss. 24, 49(2)(3)(a)(b)(4)(9), 77, Sch. 6 paras.4, 9, Sch. 17 paras. 6(3)(6), 7; S.I. 1992/58, arts. 9, 11(3),33, Sch. 2 para.1, S.I. 1992/1725, art. 107, Sch. 8 para.2; S.I. 1995/171, reg. 4(2)(a); S.I. 1995/1916, reg. 4; 1994 c. 9, s. 258, Sch. 26 Pt. V
Notes on Part XI
Modifications
- C1
See Income and Corporation Taxes Act 1988 (c. 1, SIF:63:1), ss. 114–116— special rules for partnerships involving companies.
Notes on Chapter I
Modifications
- C1
See Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), ss. 21(2), 59— Pt. XI Ch. 1 to have effect to the exclusion of those sections (persons chargeable under Schs. A and D).
Notes on Groups of companies
Modifications
- C1
See Development Land Tax Act 1976 (c. 24), s. 47(2)— s. 272 (with omission of subss. (1)(a) and (2)) and the following sections of Chapter II to have effect in relation to the Development of Land Tax Act 1976. The said Act of 1976 repealed by Finance Act 1985 (c. 54), ss. 93, 98(6), Sch. 27 Pt. X with effect from March 19th 1985.
- C2
See Finance Act 1984— for the purposes of ss. 272–281 a trustee savings bank, as defined in s. 54(1) of the Trustee Savings Banks Act 1981 (c. 65), shall be deemed to be a body corporate with effect from November 21st 1982.