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GLOSSARY

Value shifting definition

Published by a LexisNexis Tax expert

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.

For the purposes of corporation tax on chargeable gains, where the value shifting provisions in ss.29-34 TCGA 1992 apply, there is a deemed disposal of the asset when the value is extracted. The Finance Bill 2011 introduced major legislative re-writes to replace existing value shifting provisions with a new targeted anti-avoidance rule that expressly targets tax driven arrangements intended to reduce the value of a company before a share sale in order to obtain an advantage through a reduction in a charge to corporation tax on chargeable gains. There will be a specific exclusion for reductions in value attributable to the payment of an exempt distribution of profits.

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