UUÂãÁÄÖ±²¥

Overview of the value shifting rules

The value shifting rules are targeted anti-avoidance rules which apply in specified circumstances where a tax advantage has been obtained by a company as a result of a material reduction in the value of shares or securities in a subsidiary, prior to a disposal. Genuine commercial arrangements should fall outside the scope of the rules. Where the rules do apply, the consideration for the disposal is adjusted on a just and reasonable basis to amend the chargeable gain or allowable loss that would otherwise apply. Any adjustment will be of an amount that counters the tax advantage obtained.

This is unlike the depreciatory transactions provisions explained in the Depreciatory transactions guidance note, which can only apply to restrict an allowable loss.

For further detailed discussion, see ‘Value shifting and pre-sale dividends’ by Mike Lane in Tax Journal, Issue 1078, 16 (27 May 2011).

See Simon's Taxes D2.352A.

See also Simon's Taxes D2.353 and following for discussion of the rules applying to disposals before 19 July 2011.

Arrangements caught by the value