Introduction Overview Chapter 7: Gains etc Section 557: Movement of assets into ring fence
1758.This section provides that if an asset used by the residual business of a company (including a non-UK company) begins to be used by the company for the purposes of property rental business (or UK property rental business, in the case of a non-UK company), it is treated as disposed of and reacquired at market value. It also provides that, for the purposes of CAA, the transfer of the asset is treated as made at the tax written-down value. It is based on sections 126 and 134(1) of, and paragraphs 21 and 32(6) of Schedule 17 to, FA 2006.
1759.In accordance with section 535(6), if a gain arises under this section and the gain is subject to corporation tax, it is charged at the main rate.
1760.Subsection (5) provides that if a percentage of the gains of property rental business is excluded from the financial statements because the gains are attributable to a non-member, that percentage of the gains are treated as gains of a residual business.
1761.This section also applies to joint venture companies, including non-UK resident joint venture companies (see section 588).