Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Value shifting definition

What does Value shifting mean? In practice, value shifting describes arrangements that move economic value out of one asset and into another asset (or class of assets) without an actual sale or disposal of the original asset. It commonly arises where rights or benefits are altered so that one holding loses value while another gains. The term is most used in tax, where specific anti-avoidance rules address value shifting, particularly for shares and securities and transactions between connected parties. In the UK and Ireland (for example under the Taxation of Chargeable Gains Act 1992 and the Taxes Consolidation Act 1997), the rules may: - substitute market value...

UK chargeable gains anti-avoidance: value shifting general rule, tax‑free benefits rule and corporate TAAR (post‑19 July 2011)

Published by a LexisNexis Tax expert

Practice notes

value shifting rules

Value shifting rules are anti-avoidance measures. They resemble the regime for depreciatory transactions in that they address contrived movements of value out of assets arising from dealings between connected parties. Yet they have a broader reach in practice. They are engaged across a wider spectrum of situations.

Compared with the depreciatory transaction rules, they:

may bite even without a genuine disposal; a charge to tax arises at the point of the value‑shifting step because the asset is treated as disposed of;
can turn losses into gains and augment gains recognised on a disposal (actual or deemed); and
operate by reference to the asset itself, so there is no requirement to demonstrate any significant fall in the value of the asset‑holding company's shares for the rule to engage and apply.

The two sets of rules should nonetheless be considered together. For a discussion of the anti‑avoidance provisions applying to depreciatory transactions, see Practice Note: Depreciatory transactions and dividend stripping. Without these anti‑avoidance provisions, value could be moved (from one asset to another) or extracted in some way without precipitating a tax charge on the amount shifted or extracted...

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Web page updated on 22/05/2026

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