Intangibles: Degrouping

The measure

Following consultation earlier this year, the government has announced a reform of the degrouping rules in respect of post-2002 intangible fixed assets, such that they are more closely aligned with the equivalent chargeable gains rules. In short, this should result in degrouping charges not arising where the disposal giving rise to the degrouping event qualifies for relief under the substantial shareholding exemption. 


Who will be affected?

This measure will impact groups seeking to dispose of an entity holding post-2002 intangible fixed assets that were transferred within a group to that entity within the preceding six years. 


When will the measure come into effect?

This measure will have effect for degrouping events occurring on or after 7 November 2018. 

Our view

This change should help to simplify the intangible fixed assets regime and remove an asymmetry between it and the chargeable gains code. This should be a welcome change for businesses.