[CG40254] Administration: losses: targeted rules to prevent the contrived creation of capital losses by companies – example 3
Y plc is the principal company of a property group that includes a subsidiary company XLtd. X Ltd owns a property in the centre of London with a base cost of £1bn. The propertywas previously acquired from a fellow group company at no gain/no loss (TCGA92/S171) whenthe market value of the property stood at £900m. X Ltd issues shares to an unconnectedparty, B Ltd, to the extent that B Ltd holds 30% of the issued share capital of X Ltd andso X Ltd is no longer a member of the Y plc group. These new shares have very restrictedrights compared to those already in issue.