Section 184E: Sections 184A and 184B: "pre-change assets": basic rules, Taxation of Chargeable Gains Act 1992

If—

a company other than the relevant company makes a disposal of an asset, and

the asset has been disposed of at any time after the relevant time by a disposal to which section 171(1) does not apply (a "non-section 171(1) transfer"),

the asset ceases to be regarded as a pre-change asset for the purposes of sections 184A and 184B (but see also subsections (10) and (11)).

But (without affecting the generality of the provision made by the following subsection) if, on a non-section 171(1) transfer,—

an asset would cease to be regarded as a pre-change asset as a result of subsection (1), and

the company making the non-section 171(1) transfer retains any interest in or over the asset,

that interest is to be regarded as a pre-change asset for the purposes of sections 184A and 184B.

If—

the relevant company or any other company holds an asset ("the new asset") at or after the relevant time,

the value of the new asset derives in whole or in part from a pre-change asset, and

the new asset is not acquired by the company concerned as a result of a non-section 171(1) transfer,

the new asset is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B.

For this purpose the cases in which the value of an asset may be derived from any other asset include any case where—

assets have been merged or divided,

assets have changed their nature, or

rights or interests in or over assets have been created or extinguished.

If a pre-change asset is "the old asset" for the purposes of section 116 (reorganisations, conversions and reconstructions), "the new asset" for the purposes of that section is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B.

If a pre-change asset is the "original shares" for the purposes of sections 127 to 131 (reorganisation or reduction of share capital), the "new holding" for the purposes of those sections is also to be regarded as a pre-change asset for the purposes of sections 184A and 184B.

The following subsection applies if, as a result of the application of a relevant deferral provision in the case of a disposal of a pre-change asset ("the original disposal"),—

a gain or loss that would otherwise accrue to a company does not so accrue, or

any part of any such gain is treated as forming part of a single chargeable gain which does not accrue to the company on the original disposal,

and a gain or loss does, wholly or partly in consequence of the application of that provision in the case of the original disposal, accrue to the company or any other company on a subsequent occasion.

So much of the gain or loss accruing on the subsequent occasion as accrues in consequence of the application of the relevant deferral provision in the case of the original disposal is to be regarded for the purposes of sections 184A and 184B as accruing on a disposal of a pre-change asset (so far as it would not otherwise be so regarded).

A "relevant deferral provision" means any of the following—

section 139 (reconstruction involving transfer of business),

section 140 (postponement of charge on transfer of assets to non-resident company),

section 140A (transfer of a UK trade),

section 140E (merger leaving assets within UK tax charge),

sections 152 and 153 (replacement of business assets),

section 187 (postponement of charge on deemed disposal under section 185).

If—

a pre-change asset of the relevant company is transferred to another company ("the transferee company"),

any of sections 139, 140A and 140E apply to the companies in the case of the asset, and

the transfer of the asset is made directly or indirectly in consequence of, or otherwise in connection with, the arrangements mentioned in section 184A or 184B,

the asset is to be regarded as a "pre-change asset" in the hands of the transferee company for the purposes of sections 184A and 184B.

In such a case, subsection (1) applies as if the reference in paragraph (a) of that subsection to the relevant company were to the transferee company.

Section 184E: Sections 184A and 184B: "pre-change assets": basic rules

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