Value shifting


Published by a ³ÉÈËÓ°Òô Tax expert
Practice notes

Value shifting


Published by a ³ÉÈËÓ°Òô Tax expert

Practice notes
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The value shifting rules are anti-avoidance provisions. They are similar to the rules applying to depreciatory transactions in that they target the artificial transfer of value out of assets as a result of transactions between connected parties. The value shifting rules, however, apply more widely.

Unlike the depreciatory transaction rules, they:

  1. •

    do not always require an actual disposal. The rules instead impose a tax charge at the time of the value shifting transaction by deeming the asset to have been disposed

  2. •

    can convert losses into gains and increase gains realised on a disposal (whether actual or deemed), and

  3. •

    are applied at the level of the asset itself. There is, therefore, no need to prove a material reduction in the value of the asset holding company's shares for the rule to be applied

The two sets of rules should, however, always be considered together.

For a discussion of the anti-avoidance provisions applying to depreciatory transactions, see Practice Note: Depreciatory transactions and dividend stripping.

Without these anti-avoidance provisions, it would be possible for value to be shifted (from

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United Kingdom
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Key definition:
Value shifting definition
What does Value shifting mean?

When value is shifted out of one asset into another asset or assets; there does not need to have been any actual disposal of the original asset.

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