CG65835 - Effect of disincorporation relief: shareholders

FA13/S59(5)

All the shareholders to whom the business was transferred must have been individuals who had held shares in the company throughout the 12 month period ending with the business transfer date. The business did not have to be transferred to all of the shareholders of the company.

The business must have been transferred as a going concern to those individual shareholders, and they must have continued the business in succession. They may have acted in the capacity of individuals or as individual members of a partnership (but not an LLP). A nominee or bare trustee acting in such a capacity acts as though they were the individual for whom they are nominee/trustee (TCGA92/S60, see CG34320+).

TCGA92/S162B, S162C

The shareholders took on the assets which were subject to a disincorporation relief claim at a base cost equal to the amount specified in the claim to disincorporation relief.

Where an asset was transferred to more than one shareholder, each shareholder will take on the fraction of the base cost which correlates with their percentage ownership of the asset.