Succession Flashcards
Question
Answer
Capital assets (s.171) Consequences for transferor
Transfer at NGNL between members of a Capital Gains Group
“Accounting period Consequences for transferor”
“Ceases on date of transfer”
“Capital allowances Consequences for transferor”
“Allowances in final period given as if there were no disposal and assets qualifying for capital allowances are tranferred at tax WDV”
“Trading losses Consequences for transferor”
“Terminal loss claim not possible but any losses still unrelieved at date of transfer are transferred with the trade subject to the restriction below”
“Capital assets (s.171) Consequences for transferee”
“DGC will apply if co sold
“Accounting period Consequences for transferee”
“Commences on date of transfer if not previously carrying on a trade”
“Capital allowances Consequences for transferee”
“Takeover assets at tax WDV”
“Trading losses Consequences for transferee”
“Trading losses are ring-fenced and can only be offset against profits of transferred trade”
“Restricted Losses”
“Trading losses are restricted if relevant liabilities (liabilities left in the predecessor*s accounts excluding share cap, share prem, reserves and loan stock) exceed relevant assets (includes consideration for the transfer). Losses allowable will be Trading losses - (relevant liabilities - relavant assets) where relevant liabilities >0”
“Ring-fenced losses”
“The losses are ring-fenced. If the new company has a new trade, the losses will not be offset.”
