Taxes Consolidation Act 1997 section 633

Company reconstruction or amalgamation: transfer of development land

Section 633 extends to development land the no-gain/no-loss treatment that section 615 provides for other assets transferred in the course of a company reconstruction or amalgamation.

• Where a company disposes of development land to another company as part of a scheme of reconstruction or amalgamation within the meaning of section 615, the disposal is treated as giving rise to neither a gain nor a loss for capital gains tax purposes.
• The relief is necessary because gains on development land are charged to capital gains tax rather than being included in profits for corporation tax purposes, which means section 615 would not otherwise apply to such land.
• The acquiring company is treated as having acquired the development land at the time and for the consideration at which it was originally acquired by the disposing company, so that the gain is deferred rather than eliminated.
• The relief does not apply where the disposal is made in the course of a transfer to which section 631 applies, nor does it apply to land which is trading stock or which becomes trading stock of the acquiring company.