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HMRC internal manual

Capital Gains Manual

From:
HM Revenue & Customs
Published:
12 March 2016
Updated:
23 September 2026 - See all updates

CG13260 - Introduction and computation: occasions of charge: value shifting and depreciatory transactions: section 30 TCGA 1992

TCGA92/S30 provides for the consideration for a disposal, including a deemed disposal, to be increased by a just and reasonable amount where a scheme or arrangements

  • materially reduces the value of an asset

and

  • gives rise to a tax-free benefit.

If you consider that the value shifting rules in section 30 or 31 are likely to apply in a case, you should seek advice from Capital Gains Technical Group.  In corporation tax cases, you should do this via the CG specialist in your area of business.

In any case where there appears to be a significant shift in value other than for normal commercial reasons you should also consider whether the following rules may apply.

  • TCGA92/S29 - general value shifting provisions, see CG13220.
  • TCGA92/S176 and TCGA92/S177 - depreciatory transactions: loss restriction on the disposal of shares or securities by a company, see CG46500+.

Finance Act 2011 introduced the amended TCGA92/S31 as Targeted Anti-Avoidance Rule for disposals of shares and securities by companies on or after 19 July 2011. TCGA92/S30 no longer applies to such disposals. See CG48500+.


Disposals

The value shifting rules in Section 30 do not apply on a disposal at no gain/no loss under

  • TCGA92/S58 (1) - disposals between spouses or between civil partners, see CG22200+
  • TCGA92/S62 (4) - disposals by personal representatives to legatees, see CG30770
  • TCGA92/S171 (1) - disposals within a group of companies, see CG45305.

Relevant assets

For disposals before 14 March 1989, the value shifting rules applied only where the scheme or arrangements reduced the value of the asset disposed of. FA89/S135 extended the value shifting rules to cover in addition the reduction in value of any other `relevant asset'. The extension to relevant assets only applies where a company disposes of shares or securities. In such a case an asset is a relevant asset if it is owned by a company in the same group as the company making the disposal, TCGA92/S30 (2) and TCGA92/S33 (9). Detailed instructions on relevant assets are at CG46920+.

Finance Act 2011 introduced a new Targeted Anti-Avoidance Rule for disposals of shares and securities by companies on or after 19 July 2011. The relevant asset provision is only applicable to such disposals and has therefore been omitted from TCGA92/S30. See CG48500+ for guidance on the new rule for companies, TCGA02/S31.

Disposal before acquisition assets

In a straightforward case Section 30 prevents avoidance where a person acquires an asset, strips value from it in the form of a tax-free benefit, and then disposes of the asset. Without a special rule there would be scope for avoidance by first disposing of an asset not yet acquired, next increasing its value, and only then acquiring it. To counter this there is a special rule in TCGA92/S30 (9). In a case where the disposal of an asset precedes its acquisition, the references in TCGA92/S30 (1)(a) and TCGA92/S30 (2) to a reduction in value are to be taken as including a reference to an increase in value.


Tax-free benefit

A benefit arises whenever

  • a person becomes entitled to any money or money's worth
  • the value of an asset increases
  • a liability is reduced or cancelled.

A benefit is tax-free unless, at the time it arises, it is brought into account in computing the recipient`s income, profits or gains for tax purposes, TCGA92/S30 (3).

In considering whether Section 30 restricts a loss claimed under CTA10/S69 or ITA/S131 (relief against income for losses on unquoted shares in trading companies, see VCM70000+ and VCM77000+), the obtaining of loss relief should be regarded as a tax-free benefit.

The value shifting rules apply where the tax-free benefit arises to

  • the person making the disposal
  • a person connected with the person making the disposal, see CG14580+
  • any other person, unless (for this category only) tax avoidance was not a main purpose of the scheme or arrangements,

TCGA92/S30 (1)(b) and TCGA92/S30 (4).

Finance Act 2011 introduced the amended TCGA92/S31 as Targeted Anti-Avoidance Rule for disposals of shares and securities by companies on or after 19 July 2011. TCGA92/S30 no longer applies to such disposals. See CG48500+.


Method of adjustment

Where Section 30 applies the consideration for the disposal is increased for capital gains purposes by such amount as is just and reasonable, taking account of the scheme or arrangements and the tax-free benefit in question, TCGA92/S30 (5).

Gains arising from transactions caught by Section 30 may, if the relevant conditions are satisfied, qualify for relief under the various provisions dealing with gifts of assets, see CG66450.

The value shifting rules provide for a compensating reduction of consideration where

  • the consideration for the disposal of an asset is increased under Section 30(5)

and

  • the tax-free benefit giving rise to the Section 30(5) adjustment is an increase in the value of another asset

and

  • there is a disposal of that other asset after the increase in its value.

In such a case the consideration for the disposal of the other asset may be reduced by a just and reasonable amount, TCGA92/S30 (6). You should seek advice from Capital gains Technical Group if considering a compensating adjustment under Section 30(6).

Finance Act 2011 introduced the amended TCGA92/S31 as Targeted Anti-Avoidance Rule for disposals of shares and securities by companies on or after 19 July 2011. TCGA92/S30 no longer applies to such disposals. See CG48500+.


Groups of companies

Disposals before 14 March 1989

Before 14 March 1989 the value shifting rules did not apply to the disposal by one company of shares in another company where the reduction in value resulted from

  • the payment of a dividend at a time when both companies were members of the same group
  • the disposal of an asset by the second company at no gain/no loss under ICTA88/S273 (1) (now TCGA92/S171 (1)) at a time when both companies were members of the same group.

These exclusions were in CGTA79/S26 (7) before amendment by Finance Act 1989.

Disposals from 14 March 1989 to 18 July 2011

FA89 substantially changed the rules applying to intra-group dividends and asset transfers in relation to transactions on or after 14 March 1989, TCGA92/S31 - TCGA92/S34. Detailed instructions on the value shifting rules for groups of companies are at CG46800+.

Disposals from 19 July 2011

Finance Act 2011 introduced the amended TCGA92/S31 as Targeted Anti-Avoidance Rule for disposals of shares and securities by companies on or after 19 July 2011. TCGA92/S30 no longer applies to such disposals. Detailed instructions are at CG48500+.