CG65810 - Conditions for relief

FA13/S58-S60 set out the conditions which needed to be satisfied for disincorporation relief to have been available and the requirements for a claim. For guidance on the computational effect of disincorporation relief (TCGA92/S162B & S162C) see CG65820+.

Conditions
Business transfer date
Qualifying business transfer
Qualifying assets
Form of claim

Conditions

FA13/S58(1)

A claim for disincorporation relief may have been made where

  • a company transferred its business to some or all of its shareholders,
  • the transfer was a qualifying business transfer, and
  • the business transfer date fell within the period 1 April 2013 to 31 March 2018.

Business transfer date

FA13/S58(3)

The business transfer date is normally the date on which the business was transferred. But where the business was transferred under contract, the same rule as in section 28 TCGA 1992 applies. The business transfer date is the date on which the contract was made or, where the contract is conditional, the date on which that condition was satisfied and not, if different, the time at which the business was conveyed or transferred (see CG14261).

Where the business transfer involved more than one contract, the business transfer date is the date of the contract under which the goodwill was transferred.

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Qualifying business transfer

FA13/S59

A qualifying business transfer must meet all five conditions. These are:

  1. the business is transferred as a going concern,
  2. the business is transferred together with all of the assets of the business, or together with all of those assets apart from cash,
  3. the total market value of the qualifying assets at the time of the transfer does not exceed £100,000,
  4. the shareholders to whom the business is transferred are individuals, and
  5. those shareholders have held shares in the company throughout the 12 months prior to the transfer.

Individuals must not be:

  • acting as a member of a limited liability partnership (there is no restriction on individuals who intend to carry on the business as a sole trader or in a general partnership).

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Qualifying assets

FA13/S59(10)

A qualifying business transfer needed to meet all five conditions. These were:

  1. the business was transferred as a going concern,
  2. the business was transferred together with all of the assets of the business, or together with all of those assets apart from cash,
  3. the total market value of the qualifying assets at the time of the transfer did not exceed £100,000,
  4. the shareholders to whom the business was transferred are individuals, and
  5. those shareholders had held shares in the company throughout the 12 months prior to the transfer.

Individuals must not have been:

  • acting as a member of a limited liability partnership (there was no restriction on individuals who intended to carry on the business as a sole trader or in a general partnership).

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Form of claim

See CG65850.