CG58850 - Value shifting: introduction

As explained in CG13200+ it is possible to manipulate the value of assets such as shares so that value passes from one holding to another. Without special rules a transfer of value from one holding to a holding owned by another person would not be a disposal for Capital Gains Tax purposes. The value shifting rules in TCGA92/S29 were introduced to counter such avoidance.

This guidance deals with TCGA92/S29 (2) and (3) which apply specifically to share transactions. Section 29 also applies to transfers of value from assets other than shares. If you have any queries about the valuation of shares or assets and the shifting of value, please contact Shares and Assets Valuation (SAV).

This section of guidance (CG58550+) does not deal with TCGA92/S30 which is is also referred to as a “value shifting” rule. Section 30 applies to adjust disposal consideration where a scheme or arrangements

• materially reduces the value of an asset

and

• gives rise to a tax-free benefit.

Section 30 can apply to any disposal including a deemed disposal under Section 29. General guidance on Section 30 is at CG13260+.

For disposals of shares in a company by another in the same group before 19th July 2011, Section 30 was subject to TCGA92/S31-TCGA92/S34, see CG46800+. A new Targeted Anti-Avoidance Rule I TCGA92/S31 applies to disposals by companies of any shares or securities on or after 19th July, see CG48500+.