Successions to trade
B1.605 The significance of succession
For reasons concerned generally with the basis of assessment, a trader must be able to differentiate between, on the one hand, the case where he has continued throughout a particular year to carry on and develop the trade or trades that he was carrying on at the start of the year and, on the other hand, the case where a trade has been discontinued and some other trade commenced (see B1.601 ). Difficult borderline cases inevitably arise, but the distinction remains important.
As corporation tax is assessed on a current year basis and does not have the commencement and discontinuance rules which apply to partnerships and individuals, companies are not affected in quite the same way, but even for companies the issue may be crucial in regard to such matters as capital allowances and carry forward of accrued losses. In particular where the tax avoidance provisions of CTA 2010, ss 673–676 (Pt 14, Ch 2) may be concerned as a consequence of a change in the ownership of the company (see D1.1126).
A trader must also be able to differentiate between the case where he succeeds to a trade he has acquired from another taxpayer and the case where he commences a new trade, having perhaps acquired only some of the necessities of that trade from another taxpayer who used them to trade in a similar way.
Where a person starts to carry on a new trade (ie one
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