| Commentary

247 The purchasing company

| Commentary

247 The purchasing company

The purchasing company should bear in mind that the price paid for items such as land, plant and machinery, and goodwill constitutes its base cost for the purpose of computing any subsequent corporation tax liability on a capital gain. Similarly, with regard to capital allowances against corporation tax, the consideration paid for plant and machinery will determine the allowances available to the acquiring company against corporation tax, and to this extent it may wish to attribute a high value to those particular assets1. If the company is controlled by the sellers of the business,

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