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The general principle underpinning the rules relating to transfers between companies within the same group (extended in this context to include demutualisations although such transactions are becoming far less commonplace) is that the transferee should stand wholly in the place of the transferor. As such neither a taxable profit nor a relievable loss should arise on the transfer. As a corollary, the intra-group rules do not apply if the transferee is not within the charge to corporation tax since this would otherwise create an asymmetry.

An intra-group transfer is one between companies that are members of the same group and with a transferee within the charge to corporation tax¹. In determining whether parties to an insurance business transfer are members of the same group, the definition in TCGA 1992, s 170(2)–(11) is to apply².

A transfer of business is connected with a demutualisation in one of two circumstances:

1. Ìý

   (a)ÌýÌýÌýÌý it is undertaken in order to convert a company without share capital into a company with share capital but without changing the legal personality