C3.1303 Business asset disposal relief—disposal of the whole or part of a business
Whether there is a disposal of part of a business rather than a mere sale of an asset used in the business is a question of fact. The question will arise when only some of the assets of the business are sold. A disposal of a business asset, or assets, is not necessarily a disposal of the whole or part of a business. HMRC seeks to establish all the relevant facts, so that a complete picture of the business, including the changes which have been made to it, can be built up for the period involved. HMRC provides the example of a trader owning two shops in different towns and selling one of them. It may be possible for the trader to demonstrate that the activities at each shop form a separate, distinct and clearly identifiable part of the trade, or that entirely separate businesses are conducted from each shop1.
The same question on whether a disposal is of the whole or part of a business arose in relation to the availability of retirement relief and HMRC confirms that case law on that subject will be persuasive but may not provide certainty2. The majority of the retirement relief cases relate to farming businesses.
In McGregor v Adcock3 the taxpayer had been carrying on mixed farming on 35 acres of land. He obtained planning permission for five acres of the land and sold it realising a gain. He continued farming