The most common examples of depreciatory transactions are dividends, and asset transfers at less than market value. The provisions also apply to asset transfers at more than market value. An example would be where the ultimate disposal is of shares in company X which has paid £3M to another group company for an asset worth £2M. This transaction reduces the value of the shares in X by £1M. Other transactions within the definition include

the cancellation of loans or debts

the transfer of liabilities from one group company to another for inadequate or excessive consideration

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