Company 1 sold an item of plant to connected (ungrouped) company 2 on cessation for £7k. The equipment had originally cost £28k. An election for TWDV transfer was made (balance on main pool was nil). So:
Nil disposal proceeds to main pool.
Capital loss of £21k, but loss restricted to nil by TCGA 1992 s41
That seems straightforward
However, client has now sold the plant for £13k. There is therefore an unrestricted balancing charge of £13k. Not a problem, but in addition to that it seems that company 2 has a chargeable gain of £6k. I know that the two tax codes are mutually exclusive but it does seem that there is a double charge here? (£6k chargeable gain and £6k of balancing allowance that wouldn't have been there were it not for the look-through effect of the TWDV election)