Tx notes fa22 Final

5.3.
 
Advantages of Gains Group membership 
(a)
The group’s capital losses can be better utilised
(b)
Rollover relief is available on a group wide basis
(c)
Gains may be moved to a company with insu
ffi
cient profits to cover its qualifying charitable 
donations or out of a company where its profits exceed the profit limits for purposes of making 
quarterly instalment payments.

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5.4.
 
Capital losses 
(a)
An asset does not have to be moved between group companies in order to match capital 
losses and gains.
(b)
Companies in a capital gains group can make an election to deem any part of a current period 
gain or loss made by one group member to have been made by any other gains group 
member.
(c)
The advantages of the election:
‣
By not having to actually transfer assets within a group means a saving in legal and 
administrative costs
‣
The election can be made in respect of any part of a capital gain or capital loss.
 
Example 5
 
 
During the year ended 31 March 2023 Large Ltd disposed of an asset that resulted in a capital loss 
of £35,000. Smaller Ltd, the 100% subsidiary of Large Ltd, disposed of an asset that resulted in a 
capital gain of £100,000. 
Large Ltd has Taxable Total Profits of £1M and Smaller Ltd has Taxable Total Profits of £800,000 
including the chargeable gain and anticipates larger profits in the next accounting period. Large Ltd 
holds no other shareholdings.