740-840 Treatment of trading stock on intra-group transfers
As noted above, the transfer of an asset between two companies in the same group generally takes place, for the purposes of corporation tax on chargeable gains, at no gain/no loss (see ¶740-800ff). If the asset forms part of the trading stock of one of the companies (but not of the other) there is, in addition, a market value adjustment for tax purposes.
Transferee acquiring as trading stock
Where the asset is acquired by the recipient of the transfer ‘as trading stock’ (see below), that company is treated for limited purposes as having acquired the asset otherwise than as trading stock and immediately appropriated it from capital to trading stock (TCGA 1992, s. 173(1)).