controlled transfer

What is the purpose of the controlled transfer (CT) provision?

• To prevent excessive claims of capital allowances between related parties

• To facilitate excessive claims of capital allowances between related parties

• To encourage related parties to transfer assets freely

• To discourage related parties from engaging in business activities

Under what circumstances will a disposal of a qualifying asset be subject to the CT provision?

• If the disposer has control over the acquirer of the asset

• If the disposal is not related to any business activities

• If the asset is used as trading stocks by the acquirer

• If the disposal is effected by way of settlement or gift

What does 'control' mean in relation to a company?

• The right to conduct the company's business activities freely

• The right to a share of more than one-half of the company's assets

• The power available to a person to conduct the company's affairs in accordance with the person's wishes

• The power conferred by the articles of association regulating the company

What is the deemed disposal value (DV) when the CT provision applies?

• The asset's market value at the time of disposal

• The actual sales proceeds

• The asset's residual expenditure

• The asset's original qualifying expenditure

When does the acquirer inherit the qualifying expenditure of the disposer under the CT provision?

• When the original acquisition date falls after 'that date'

• When the actual disposal date falls earlier than 'that date'

• When the actual disposal date falls later than 'that date'

• When the original acquisition date falls on 'that date'

What is the general CT treatment when the actual disposal date is later than 'that date' but the original acquisition date falls on or after 'that date'?

• The acquirer is only entitled to claim the annual allowance (AA) on the asset

• The disposer is entitled to claim both the initial allowance (IA) and annual allowance (AA)

• The acquirer is entitled to claim both the initial allowance (IA) and annual allowance (AA)

• The disposer is not entitled to claim any allowances on the asset

What is the process to determine 'that date' under the CT provision?

• It is the disposer's original acquisition date

• It is the disposer's basis period for the first year of claiming capital allowances

• It is the acquirer's year-end date

• It is the actual disposal date of the asset

When does the CT treatment differ from the general treatment?

• When the asset is used as trading stocks by the acquirer

• When the actual disposal date falls earlier than 'that date'

• When the disposal is effected by way of settlement or gift

• When the disposer's original acquisition date falls before 'that date'

What conditions need to be satisfied for the controlled transfer provisions to apply?

• The assets must be disposed of within 6 months of acquisition

• The acquirer must control the disposer

• The assets must be used for trading stocks

• The company must have a year-end