Taxes Consolidation Act 1997 section 623A

Transitional provisions in respect of section 623

Section 623A provides a transitional rule to ensure that the change in the definition of a capital gains group introduced by the Finance Act 1999 does not, of itself, trigger a charge on deferred gains held within a group.

• Where the new group definition (effective 11 February 1999) caused a company to cease to be a group member, the deemed disposal of assets under section 623(4) is not immediately triggered.
• The deferred gain crystallises only if the company subsequently leaves the group under the old (pre-Finance Act 1999) definition.
• At the time of that later departure, the company (or an associated company also leaving the group) must still hold the asset or a replacement asset acquired under group rollover relief.
• The asset must have been acquired by the group within the ten-year period ending on the date the company leaves the group under the old definition.