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D6.310 Transfer of a trade—overview

On a transfer of a trade, or part of a trade from one company (the predecessor) to another (the successor), there are often a variety of tax issues to consider. The tax consequences depend on the types(s) of assets being transferred as well as on the level of ownership that exists between the two companies.

The impact of the transfer of a trade (or part trade) on the following areas is discussed below:

1. Ìý

   •ÌýÌýÌýÌý cessation and commencement treatment of the two companies

2. Ìý

   •ÌýÌýÌýÌý trading losses and patent box losses of the transfer

3. Ìý

   •ÌýÌýÌýÌý capital allowances

4. Ìý

   •ÌýÌýÌýÌý intangible fixed assets

5. Ìý

   •ÌýÌýÌýÌý capital gains

It should be noted that these issues are relevant not only to intra-group transfers, but also to transfers between unrelated companies. The details are included here on the basis that trade transfers are usually done intra-group.

Additional rules apply to trade transfers where there is 75% common ownership between the companies concerned. In such cases, special rules apply to preserve capital